Japanese consumer electronics giant Sony is to increase the number of components it procures jointly with Sony Ericsson in a bid to save money at its struggling handset unit, a joint-venture with Sweden’s Ericsson. According to a Reuters report today, which cites Japan’s Nikkei business daily, the two already jointly purchase capacitors and now plan to expand the list of products to include components used in both Sony’s electronics products and Sony Ericsson mobile phones. The two eventually plan to procure about ten types of parts together, the paper said without citing sources. The strategy is designed to bolster the two companies standing in price negotiations with suppliers. Sony is expected to inform its key suppliers of the plan as early as this month.
The strategy is the latest move by one of Sony Ericsson’s parent companies to prop up the ailing handset vendor, which has reported steep losses in past quarters and seen its share of the global handset market slip below 5 percent. Large losses at Sony Ericsson have sparked market speculation of a possible breakup of the 50-50 venture, but both Sony and Ericsson have said recently they are committed to the operation and could inject more money into it if necessary. At the beginning of the week, Sony Ericsson announced that Ericsson VP Bert Nordberg will become its new president later this year, and the incoming head man has already targeted a return to profit and an increase in market share as his first priorities.
Comments