Sony Ericsson is a joint venture established on October 3, 2001 by the Japanese consumer electronics company Sony Corporation and the Swedish telecommunications company Ericsson to make mobile phones. The stated reason for this venture is to combine Sony's consumer electronics expertise with Ericsson's technological leadership in the communications sector. Both companies have stopped making their own mobile phones.

The company's global management is based in Hammersmith, London, and it has research & development teams in Sweden, Japan, China, Germany, the United States, India, Pakistan and the United Kingdom. By 2008, it was the fifth-largest mobile phone manufacturer in the world after Nokia, Samsung, LG and Motorola. The sales of products largely increased due to the launch of the Walkman and Cyber-shot series.

Recent performance

While Sony Ericsson has been enjoying strong growth recently, its South Korean rival LG Electronics overtook it in Q1 2008 due to the company's profits falling significantly by 43% to €133 million (approx. US$ 179.6697 million ), sales falling by 8% and market share dropping from 9.4% to 7.9%, despite favourable conditions that the handset market was expected to grow by 10% in 2008. Sony Ericsson announced another profit warning in June 2008 and saw net profit crash by 97% in Q2 2008, announcing that it would cut 2,000 jobs, leading to wide fear that Sony Ericsson is on the verge of decline along with its struggling rival, Motorola. In Q3 the profits were much on the same level, however November and December saw increased profits along with new models being released such as the C905 being one of the top sellers across the United Kingdom.

Sony Ericsson has, as of July 18, 2008, approximately 9,400 employees and 2,500 contractors worldwide. Hideki Komiyama is the president of the company and has been since November 1, 2007 when he replaced Miles Flint. The Corporate Executive Vice President is Anders Runevad.

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 source on 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 (the other major customer of the facility) that production would be delayed by less 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 both production of current models and the launch of new ones was held up.

Ericsson, which had been in the cellular phone market for decades and was the world no. 3 cellular telephone handset maker was struggling with huge losses in spite of booming sales since 2000 due to this fire and its inability to produce cheaper phones like its competitor Nokia. To curtail the losses, it was thinking of outsourcing production to Asian companies that can produce the handset for lower costs.