Sony, Ericsson to collaborate on handsets

Sony confirmed it is considering a joint venture with Ericsson that would combine the companies’ mobile-phone businesses. While neither company has released any details of the proposed venture, Sony announced that no solid decisions have been made yet.

For Ericsson, which will release its first-quarter earnings early tomorrow, an alliance with a brand like Sony could help it regain some of the market share it has lost in Europe. The deal also could help Sony.

“This would be great for Sony, because it gets them into Ericsson’s accounts,” said Cliff Raskind, title at Strategy Analytics. “It is a good way for the company to get presence.”

However, because Ericsson’s business structure differs greatly from that of consumer-market-oriented Sony, there could be some corporate conflict.

In 1998, a similar mobile-phone deal between Lucent Technologies and Philips failed to last beyond a year likely because of some kind of corporate conflict, Raskind said. The pairing of Japan’s Sony with Ericsson could end up suffering the same fate.

If the deal works, it could help boost Ericsson’s position in the mobile phone business space and become a model for other handset companies.

“The trend might be that some of the top handset players are looking for Asian know-how,” he said. “This deal would not be about the volume market…with Sony, it is about advanced multimedia and the development of 3G terminals.”