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Troubles in Ericsson's mobile phone business
In the United States, Ericsson partnered with General Electric in the early nineties, primarily to establish a US presence and brand recognition.
Ericsson had decided to obtain 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 (their other major customer) that production would be delayed for no more 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 production of current models and the launch of new ones was held up.[10]
Ericsson, which had been in the cellular phone market for decades, and was the world's no. 3 cellular telephone handset maker, was struggling with huge losses. This was mainly due to this fire and its inability to produce cheaper phones like Nokia. To curtail the losses, it considered outsourcing production to Asian companies that could produce the handsets for lower costs.[according to whom?]
Speculation began about a possible sale by Ericsson of its mobile phone division, but the company's president said they had no plans to do so. "Mobile phones are really a core business for Ericsson. We wouldn't be as successful (in networks) if we didn't have phones", he said.[citation needed]
[edit]Background of the joint venture
Sony was a marginal player in the worldwide cell phone market with a share of less than 1 percent in 2000.
By August 2001, the two companies had finalized the terms of the merger announced in April. The company was to have an initial workforce of 3,500 employees.
Ericsson's market share actually fell and in August 2002, Ericsson said it would stop making mobile phones and end its partnership with Sony if the business continued to disappoint. However, in January 2003, both companies said they would inject more money into the joint venture in a bid to stem the losses.
Sony Ericsson's strategy was to release new models capable of digital photography as well as other multimedia capabilities such as downloading and viewing video clips and personal information management capabilities. To this end, it released several new models which had built-in digital camera and color screen which were novelties at that time. The joint venture, however, continued to make bigger losses in spite of booming sales. The target date for making a profit from its first year to 2002 was postponed to 2003 to second half of 2003. It failed in its mission of becoming the top seller of multimedia handsets and was in fifth-place and struggling in 2005.

Annual net income or loss 2003 to 2009
[edit]Beginning of the turnaround
In June 2002, Sony Ericsson announced it would stop making Code division multiple access (CDMA) cellphones for the US market and would focus on GSM as the dominant technology. It also cut jobs in research and development in the USA and in Germany. In October 2003, it posted its first quarterly profit but warned that falling prices on phones and competition would make it difficult to stay in the black. Sony Ericsson's recovery is credited to the success of the T610 model. Although Sony Ericsson no longer makes CDMA cellphones for the global market, they still manufacture CDMA cellphones for Japanese market, mainly for au by KDDI. In 2011, they launched Xperia PLAY with CDMA network for Verizon Wireless in US.[citation needed]
Following the success of its P800 phone, Sony Ericsson introduced the P900 at simultaneous events in Las Vegas and Beijing in October 2003. It was pegged as smaller, faster, simpler and more flexible than its predecessor.[11]
In March 2004, Ericsson said it would try to block its rival Nokia from gaining control of Symbian, an industry consortium that made operating software for smart phones.[citation needed]
In 2004, Sony Ericsson's market share increased from 5.6 percent in the first quarter to 7 percent in the second quarter[citation needed]. In July 2004, Sony Ericsson unveiled the P910 communicator with its integrated thumbboard, broad e-mail support, quadruple memory and improved screen.
In February 2005, Sony Ericsson president Miles Flint announced at the 3GSM World Congress that Sony Ericsson would unveil a mobile phone/digital music player in the next month. It would be called the Walkman phone and would play music file formats such as MP3 and AAC.[citation needed]
[edit]Success with Walkman and Cyber-shot phones
On March 1, 2005, Sony Ericsson introduced the K750i with a 2 megapixel camera, as well as its platform mate, the W800i, the first of the Walkman phones capable of 30 hours of music playback, and two low-end phones.
In 2007 their first 5-Megapixel camera phone, the Sony Ericsson K850i, was announced followed in 2008 by the Sony Ericsson C905, the world's first 8-Megapixel phone.[citation needed] At Mobile World Congress 2009, Sony Ericsson unveiled the first 12-Megapixel phone, named Satio, on May 28, 2009.
On May 1, 2005, Sony Ericsson agreed to become the global title sponsor for the WTA Tour in a deal worth 88 million US dollars over 6 years. The women's pro tennis circuit was renamed the Sony Ericsson WTA Tour. Just over a month later on June 7, it announced sponsorship of West Indian batsmen Chris Gayle and Ramnaresh Sarwan.
In October 2005, Sony Ericsson presented the first mobile phone based on UIQ 3, the P990.
On January 2, 2007, Sony Ericsson announced in Stockholm that it will be having some of its mobile phones produced in India. It announced that its two outsourcing partners, FLextronics and Foxconn will be producing 10 million cellphones per year by 2009. CEO Miles Flint announced at a press conference held with India's communications minister Dayanidhi Maran in Chennai that India was one of the fastest growing markets in the world and a priority market for Sony Ericsson with 105 million users of GSM mobile telephones.
On February 2, 2007, Sony Ericsson acquired UIQ Technology, a Swedish software company from Symbian Ltd.. UIQ will remain an independent company, Miles Flint announced.[12]
On October 15, 2007, Sony Ericsson announced on Symbian Smartphone Show that they will be selling half of its UIQ share to Motorola thus making UIQ technology owned by two large mobile phone companies.
[edit]Sony Ericsson Cost-Cutting Program And Job Losses
In June 2008, Sony Ericsson had about 12,000 employees, it then launched a cost-cutting program and by the end of 2009 it had slashed its global workforce by around 5,000 people. It planned to cut another 1,500 jobs in 2010. It has also closed R&D (research and development) centres globally, such as, Chadwick House, Birchwood (Warrington) in the UK; Miami, Seattle, San Diego and RTP (Raleigh, NC) in the USA; The Chennai Unit (Tamil Nadu) in India; Hässleholm and Kista in Sweden and operations in the Netherlands. The UIQ centres in London and Budapest were also closed, UIQ was a joint venture with Motorola which began life in the 1990s.[13][14][15][16][17][18][19][20][21][22][23]

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