Sony Ericsson is a joint venture established in 2001 by the Japanese consumer electronics company Sony Corporation and the Swedish telecommunications company Ericsson to make mobile phones. The stated reason for this venture is to combine Sony's consumer electronics expertise with Ericsson's technological leadership in the communications ctor. Both companies have stopped making their own mobile phones. The company's global management is based in Hammersmith, London, and it has research & development teams in Sweden, Japan, China, Germany, the United States, India, Pakistan and the United Kingdom.While Sony Ericsson has been enjoying strong growth recently, its South Korean rival LG Electronics overtook it in Q1 2008 due to the company's profits falling significantly by 43% to €133 million (approx. US$ 193.6746 million [1]), sales falling by 8% and market share dropping from 9.4% to 7.9%, despite favourable conditions that the handset market is expected to
grow by 10% in 2008. The situation is getting worse as Sony Ericsson announced another profit warning in June 2008[2] and saw net profit crash by 97% in Q2 2008, announcing that it would cut 2,000 jobs, leading to wide fear that Sony Ericsson is on the verge of decline along with its struggling rival, Motorola.[3] Sony Ericsson has, as of July 18, 2008, approximately 9,400 employeesEricsson, which had been in the cellular phone market for decades, decided to divest this business in 2001 following huge losses. Ericsson had decided to source on chips for its phones from a single source, a Philips facility in New Mexico. In March 2000 a fire at the Philips factory contaminated the sterile facility. Philips assured Ericsson and Nokia (the other major customer of the facility) that production would be delayed by less than a week. When it became clear that production would actually be compromised for months, Ericsson was faced with a serious shortage. Nokia had already begun to obtain parts from alternative sources, but Ericsson's position was much worse as both production of current models and the launch of new ones was held up.[4] In the United States, Ericsson partnered with General Electric in the early nineties, primarily to establish a US presence and brand recognition.
