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Sony Ericsson: East Meets West

By Paul Wise

Republish: EasyPublish™
Published: 27Sep2009
Word count: 400
Viewed: 338 time(s)

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Sony Ericsson is a joint venture between the Japanese consumer electronics company Sony Corporation and the Swedish telecommunications company Ericsson. It was felt that the combination of Sony's consumer electronics expertise with Ericsson's technological leadership in the communications sector would allow both companies to gain more market share than they have had individually as competitors. With global headquarters in Hammersmith, London and research and development teams in Sweden, Japan, China, Germany, the United States, India, Pakistan and the United Kingdom, Sony Ericsson was the fifth-largest mobile phone manufacturer in the world after Nokia, Samsung, LG, and Motorola as of 2008. The company had, during that same year, approximately 9,400 employees and 2,500 contractors worldwide.

Back in 2000, Sony was a shockingly marginal player in the global cell phone market, with a share of less than 1 percent. Ericsson was partnered with General Electric in the U.S. since the early nineties, primarily to establish an American presence with some brand recognition. But by August 2001, both Sony and Ericsson had finalized the terms of their merger, including an initial workforce of 3,500 employees.

Despite the aim of profitability their very first year, Ericsson's market share actually fell and only a year later the company announced that it would stop making mobile phones and end the partnership if business didn't pick up, while Sony stated that it was still fully committed to the joint venture and wanted to make it a success. In 2003, both companies agreed to inject more money into their project in response to continuing losses. The strategy was to release new models capable of digital photography as well as other multimedia capabilities. Several new models were introduced which had built-in digital cameras and color screens, exciting novelties for that time. Despite booming sales, the partnership kept posting ever-bigger losses, with projected profitability rescheduled even further back.

Sony Ericsson's current best-sellers are its Walkman and Cyber-Shot lines of multimedia phones. The company had been on a turn-around until the last quarter of 2008, which saw a devastating 97 percent drop in profits and the layoff of 2,000 employees. Sony Ericsson is the third largest manufacturer of mobile handsets in the world, after rivals Nokia and Samsung, but commands only slightly more than 8 percent of global market share. After three consecutive years of increased sales, figures dropped. There are recurrent fears that Sony Ericsson, along with struggling rival Motorola, may one day bow out of the cell phone industry altogether.

Article written by Paul Wise. Paul has done extensive research on Sony Ericsson. If you want to save money by buying used cell phones or refurbished cell phones, visit ZoomWirelessOnline.com.

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