Sony and Ericsson in joint-venture talks

In a bid to strengthen its cellular phone businesses globally, Sony Corp. said late last month that it had been in talks with Sweden’s L.M. Ericsson Telephone Co. with a view to broader collaborations, which could potentially lead the two companies to form a joint venture.

The statement came after Japan’s public television NHK reported last month that the companies have agreed to form a cellular phone venture in Britain by the end of this year, and the deal would be announced next week.

Later that day, Japan’s leading business daily Nihon Keizai Shimbun (Nikkei) said the joint venture would cover areas such as developing, designing and marketing of cellular phones. Nikkei said Ericsson, the world’s third-largest mobile phone maker, proposed the sale of its cell phone division to Sony but the Japanese company chose to integrate instead.

Nikkei reported that the firm would be capable of producing 49 million units, worth about 700 billion yen a year. In 2000, Ericsson shipped more than 41 million phones. Sony has reportedly delivered 7.5 million units. Sony produces a handset model that can also play music stored on its proprietary memory card along with other models for Japan’s mobile phone carriers such as NTT DoCoMo and DDI.

Ted Kanno, spokesperson for Sony, said: “We are pursuing a variety of possibilities in doing businesses together. Creating a new company, integrating our management resources for mobile phone businesses, forming an alliance… these are all possible options. But we have not yet finalized our thoughts on how we can proceed on this area together or which one of the ideas we have had is the best for us.”

Jan W