Background of the joint venture

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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.






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