Sony Ericsson Partnership Survives… For Now

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Sony and Ericsson have decided to inject another 300 million euros, about $324 million, to their 50:50 jointly owned Sony Ericsson Mobile Communications, which makes handsets and smartphones that run the Symbian operating system.

Until this announcement, the joint venture looked like it might be coming to an end. The partnership has continuously lost money since it was formed and last summer Ericsson announced that it would stop keeping it on life support. It said it would pull out if Sony Ericsson didn’t have at least 10% of the market or a profitable balance sheet by the end of the year.

Neither one of those happened. It lost 69 million euros ($75 million) during the fourth quarter of last year and sold 7.1 million units, giving it 6% of the market. It isn’t known at this time why Ericsson changed its mind.

There was some speculation that Sony would consider making smartphones based on the Palm OS if the Sony Ericsson partnership collapsed, considering it is already a licensee of that operating system. Several other companies already make Palm OS smartphones, including Handspring, Samsung, Kyocera, and Palm itself.

The two companies are have set modest goal for this year. They estimate that Sony Ericsson will sell 435 million units, a 10% increase over 2002.

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