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Ericsson remains committed to Sony joint venture

The chief executive of telecommunications specialist Ericsson has reaffirmed his company's commitment to its mobile phone joint...

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The chief executive of telecommunications specialist Ericsson has reaffirmed his company's commitment to its mobile phone joint venture with Sony.

Kurt Hellström, chief executive of Ericsson, emphasised his commitment to the handset joint venture Sony Ericsson Mobile Communications, saying the Swedish company has no plans to pull out, despite market speculation.

He said both partners knew beforehand that the venture would rely mainly on existing products during its first year of operation and that its market share would grow only when new models were introduced in the second year.

Sony Ericsson Mobile Communications will shortly launch next-generation phones with MMS (Multimedia Messaging Service) capability, he said.

Last month Hellström was quoted in an interview with The Wall Street Journal saying Ericsson will not continue pumping money into the venture unless its products catch on quickly. An Ericsson spokeswoman said these remarks had been misinterpreted.

Hellström's statement about Ericsson's plans to outsource its IT operations to reduce operating costs was correctly reported in the WSJ story, the spokeswoman added.

In Shanghai, Hellström said he expects Ericsson to post a profit in 2003.

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