Content area
Full Text
TELECOMWORLDWIRE-24 April 2001-Ericsson and Sony to merge mobile phone businesses (C)1994-2001 M2 COMMUNICATIONS LTD http:// www.m2.com The Swedish telecommunications group Ericsson and the Japanese Sony Corporation have signed a memorandum of understanding to merge their mobile phone businesses. According to plans Ericsson and Sony are to transfer all of their mobile phone activities worldwide to a new company, Sony Ericsson Mobile Communications, the management of which is to be located in London, UK. The new company will initially have some 3,500 employees and comprise Ericsson's and Sony's assets in North America, the UK, Sweden and Japan. The new company will not include Ericsson's Bluetooth licensing operations and certain Chinese manufacturing assets, although these will support the new company. The operations of Sony Ericsson Mobile Communications are expected to begin on 1 October. The first new products - representing a new brand, according to Ericsson's CEO Kurt Hellstrom - will follow in the first half of 2002. The aim is to create the leading player in next generation mobile communications combining Sony's know-how in the electronic consumer products sector and Ericsson's telecommunications technology. Ericsson, which managed to show a first quarter profit only because of asset sales, has said that its efficiency programme will affect as many as 10,000 employees. The number of employees in the joint venture with Sony appears to confirm the announced job losses. Despite the company's previous confirmation that it did not expect pre-tax income to improve during the second quarter Kurt Hellstrom told journalists at the joint Sony-Ericsson press conference in Stockholm today (24 April) that he expected the new company to be profitable from the outset. ((Comments on this story may be sent to [email protected]))