Sony, Ericsson in mobile deal

Chairman Helstrom announces the rebranding plans

Sony and Ericsson are setting up a joint venture to create a new range of mobile devices.

The companies got together to combine Ericsson's telecoms expertise with Sony's expertise in consumer electronics.

The products created will have neither companies' names on them, instead being marketed under a new brand in a similar fashion to the Playstation or Walkman, according to Kurt Hellstrom, chief executive of Ericsson and the new venture's chairman.

Mobility and wireless is about to cross the border into all sorts of consumer electronics

Kurt Hellstrom
Sony Ericsson Mobile Communications

The development of a new brand is part of the new company's plan to accelerate the development of the mobile phones of tomorrow.

"We will create totally new multimedia mobile products," said Mr Hellstrom.

These phones will become entertainment, video, games and music consoles in addition to being telephones and personal organisers.

"Mobility and wireless is about to cross the border into all sorts of consumer electronics; Walkman, Gameboy, video cameras and so on," Mr Hellstrom said.

Mr Hellstrom said he still expects more people to access the internet from a mobile unit than from a fixed device by 2003.

"It will change the way we communicate with each other. And it will most certainly change the business game for our industry."

London base

A new company will be set up in London to oversee the research and development, industrial design, sales and distribution of the mobile handsets.

Today's phone

Sony Ericsson Mobile Communications will be operational from 1 October this year and it will launch its first products during the first half of 2002.

It will have a global work force of 3,500.

But the company will not produce the phones.

This will be done by Sony, or by Ericsson's partners, including Flextronics.

Combatting losses

The Japanese electronics giant Sony and the Swedish mobile phone company Ericsson joined forces to revitalise their lossmaking mobile phone operations.

Tomorrow's phones?

Each of the companies will own 50% of the new venture.

Sony will benefit from the deal because of Ericsson's customer base and mobile telephony knowhow.

Ericsson will benefit from links with Sony because its electronics products are seen as innovative, stylish and popular with consumers.

Under the deal, the two companies will retain the right to continue selling their existing products.

However, an Ericsson spokesman said "we will not have pure Ericsson phones", adding that the company will slowly migrate its old business into the new venture.