14 DAY TRIAL // It seems that the Japanese-Swedish joint venture Sony Ericsson still has some more time to live before falling apart, as Ericsson, a leading mobile telecom equipment maker, stated on Wednesday that it intended to pump money into the company in case it needed it, something that should put an end to previous rumors that the manufacturer intended to leave its partner Sony alone in the mobile phone development business.
“In the situation they are in today, it is a natural measure to take that we plan for this so that we have the readiness if it were necessary,” Ericsson CEO Carl-Henric Svanberg told reporters before the company's annual general meeting. “Then we will consider things depending on how the operations (of Sony Ericsson) develop.”
As many of you might already know, Sony Ericsson posted negative revenue for the first quarter of the year, namely a $386 million net loss and a 36 percent drop in sales. As a result of the weak performance for the time frame, the mobile phone joint venture between Sweden's Ericsson and Japan's Sony, which is currently the fourth largest handset maker in the world, announced plans to cut 2,000 jobs, after having laid off the same number of employees since the beginning of the ongoing year, a figure that accounts for about a fifth of its entire workforce. In addition, the phone maker also stated that the global handset market was expected to shrink 10 percent during the ongoing year due to the financial turmoil.
Earlier this year Ericsson was rumored to plan on leaving the joint venture, with Sony intent on acquiring the company's 50-percent stake in the alliance, yet it seems that Ericsson will remain committed to the business. According to Svanberg, the joint venture was important to Ericsson due to the fact that it could have a glimpse of what consumers would like.