Ericsson boss pledges support for Sony Ericsson JV
Ericsson CEO Hans Vestberg says the struggling handset firm helps the network vendor understand customer usage and behaviour
Ericsson CEO Hans Vestberg yesterday gave his backing to handset manufacturer Sony Ericsson, emphasising the benefits of the joint venture to the network infrastructure vendor.
Sony Ericsson, a tie-up between Swedish telecom equipment supplier Ericsson and Japanese electronics firm Sony, has suffered over the past 18-months with many consumers choosing not to replace their old handsets with new ones.
Reflecting a downward global trend, Sony Ericsson's handset shipments dropped from 24.2 million in the fourth quarter of 2008 to 14.6 million in the last quarter of 2009, prompting losses of EUR878 million (US$1.1 billion) in 2009.
There has been some speculation that Ericsson would divest its stake in the handset maker, but Vestberg told CommsMEA that despite "facing problems", Ericsson would continue to support the venture, which recently experienced slight quarter-on-quarter growth in sales.
"Historically [Sony Ericsson] has been a very important piece for us," the Ericsson boss said. "It helps us to understand the consumer market, and to understand how people are connecting with the network. It helps us optimise that, and that is still very valid for us."
When asked if it was necessary for Ericsson to maintain a financial interest in the company to gain insight into customer usage and behaviour, Vestberg replied:
"Yes, I think so. We have been in Sony Ericsson since 2001. There have been losses for four quarters, plus two more, but all other quarters have been fine and they have been generating a lot of dividends for us as a shareholder.
"But now they are facing problems the first thing that we are doing is asking how we can support them to help them come over this. We are taking out costs, changing the product portfolio, and we have a great management team and that is what we are focusing on. We want them to succeed, and we are there to support them on that."