Sony, Ericsson may inject cash into joint venture

Sony and Ericsson are poised to inject cash into their joint venture, Sony Ericsson, according to a report in the Financial Times. The two companies will guarantee a loan to Sony Ericsson to bolster the handset maker's balance sheets.

The news comes a little more than two weeks after Ericsson indicated it was considering the possibility of having to prop up Sony Ericsson, and underscored the precarious financial position of the joint venture. Ericsson CEO Carl-Henric Svanberg told the FT that a capital injection was "not unlikely." Sony said it was premature to speculate about a possible cash infusion, but said if it came to that, Sony would not hesitate to aid Sony Ericsson.   

Hideki Komiyama, Sony Ericsson's president, did not shy away from the challenges facing the company. "If we do not adapt to this new technology or new market environment, we're going to lose," he told the FT in a separate article. According to that report, the company is planning to launch two new smartphones by the end of 2009 and a third in early 2010. The smartphones will run a variety of platforms, including Symbian, Google's Android OS and Windows Mobile.   

Sony Ericsson posted a $386 million net loss for the first quarter and sales tumbled 36 percent. As a result, the handset joint venture said it would cut 2,000 more jobs, or about one-fifth of its workforce. In January, Komiyama predicted a tough 2009 for the company, and said that the company would focus on high-end devices, even if that meant a less diverse portfolio for the time being. 

For more:
- see this FT article
- see this article on Sony Ericsson's future

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