14 DAY TRIAL // It seems that the joint venture between Sony and Ericsson might come to an end after all. There have been a lot of speculations going around about the breakup between the two companies, and it seems that the infrastructure provider, Ericsson, has finally decided that it is time to leave the mobile phone game and return to its core business.
A recent news report published by the German magazine Der Spiegel talks about the separation of the two, while also stating that Sony would be interested in purchasing Ericsson's share in the joint venture. At the same time, it seems that, currently, the Japanese manufacturer does not have the means to strike the deal with its partner, though the company is in talks with some banks to secure financing in this regard.
Nevertheless, Sony might face further issues in the matter both due to the fact that the current economical climate is not a favorable one, as well as because the company has seen its revenues fall during the last three months of 2008, and also posted losses for the entire year. For what it's worth, the company expects to be able to become profitable once again starting with the second half of the ongoing year.
Sony registered a 95-percent drop in profits during the last quarter of 2008 and announced cost reduction measures that included 8,000 layoffs and the closing of 10-percent of its manufacturing facilities. While predicting a net loss of 150 billion yen ($1.67 billion) for the fiscal year, Chief Executive Howard Stringer also said that the cost cutting measures might not be enough. During the same quarter, Sony Ericsson also registered losses.
Sony and Ericsson established the mobile phone manufacturing joint venture known as Sony Ericsson back in 2001, when Ericsson was nearly crippled by a fire at the Philips factory in Albuquerque, its only supplier of semiconductors. For the time being, it seems that Ericsson hasn't confirmed the rumors, yet, given the fact that the story about the breakup between the co-owners has surfaced a few times before, there might be some truth behind it.