Ericsson and Sony in mobile tie-up

Ericsson: Making phones few people want to buy

Swedish telecoms giant Ericsson and Sony have confirmed they are to merge their mobile businesses in a joint venture.

The move - first announced earlier this year - can be seen as an attempt to gain a march on mobile giants Nokia and Motorola.

Sony Ericsson Mobile Communications sold about 50 million mobile phones last year, with pro forma revenues of $7.2bn (£4.9bn).

Both companies are expected to continue selling their phones under their current brand names, with a new brand name expected in the second half of next year.

There are clear advantages to both companies of a merger, David Clevely, managing director of Analysys, told the BBC's World Business Report.

Unpopular phones

"Ericsson have produced some extremely good mobile phones, but they don't sell very well because the consumers don't like them very much...Sony has has failed to get into what other would otherwise be a natural consumer gadget market for them," he said.

"Sony has got a very major market in Europe...in broadcasting and consumer goods," he said. "In mobile products, it has been pretty bad at making any inroads."

"The mobile market is dominated by Nokia, it is very difficult for other smaller manufacturers to get in and grab a slice of the cake," he said.

"They have a good chance of overcoming what would otherwise be a pretty difficult trick to pull off," he said.