Ericsson, Sony to merge mobile phone businesses

L.M. Ericsson Telephone Co. and Sony plan to merge their mobile phone businesses and create a new mobile phone brand, the companies announced last week.

The two companies will create a joint venture called Sony Ericsson Mobile Communications, in which each will own a 50 percent stake. The new company, scheduled to start operations on Oct. 1, will be based in London and be led by Katsumi Ihara, now in charge of mobile business at Sony. Financial terms of the deal were not disclosed.

Both companies will transfer their mobile phone operations to the joint venture, which is expected to have 3,500 employees from the start -- 2,500 from Ericsson and 1,000 from Sony -- including research and development, marketing, sales, distribution, and customer service staff, officials said.

Manufacturing, which will not form part of the joint venture, will continue to take place in facilities owned separately by Sony and Ericsson as well as at Flextronics International Ltd., Ericsson's outsourcing partner. The first products from the joint venture are due in the second half of 2002.

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