Sony-Ericsson – is a divorce on the cards?

28 Aug 2008

The web is abuzz with rumours that the alliance between Japanese technology giant Sony and Swedish comms giant Ericsson is about to be rent apart, driven by disappointing product launches and a failure to clinch the elusive No 3 market position worldwide.

In an interview with a German newspaper, Sony chief executive Howard Stringer suggested that there were difficulties emerging between the two camps.

According to Gartner’s quarterly review of the global mobile-phone sector, Sony Ericsson’s market share grew only slightly in the second quarter of 2008 sequentially with worldwide mobile-phone sales reaching close to 23 million units.

However, annual market share fell by 1.4 percentage points, preventing the vendor from advancing from its No 5 position in the worldwide mobile-handset market.

Gartner analyst Carolina Milanesi said her confidence in an improved performance by Sony Ericsson weakened further because recent product announcements were disappointing since they delivered similar current features and designs.

Sony Ericsson has gone form eyeing the No 3 position in the worldwide ranking to fighting to regain the No 4 spot in just a few quarters. According to Gartner, Sony Ericsson needs new designs and a wider feature and application offering to remain competitive.

The top-four spots in the world were held by Nokia, Samsung, Motorola and LG respectively.

Reminded of the ongoing decline of the Sony Ericsson joint venture and asked if it was time Sony and Ericsson went their separate ways, Stringer told German newspaper Die Welt: “It’s certainly been a difficult year, but, buying out a partner is never an easy thing.”

He said that one of the most important attributes of the digital age is to be nimble and “it is hard to be as nimble in a joint venture as it is within your own company, because you’re always engaged in discussion and negotiation.”

Asked if Sony Ericsson may still be around in three years, Stringer said: “We have to work together again as we did two years ago or the joint venture will have to find its own solution.”

By John Kennedy