Sony Ericsson, the joint venture between Japan's Sony and Sweden's Ericsson, in the fourth quarter of 2011 lost 317 million dollar. The company gives several reasons for the disappointing figures.
According to Sony Ericsson, the compant has fierce competition in the mobile phone market, which means that the price of phones must be kept low. The macroeconomy is going down as well, and the brand has suffered from the consequences of floods in Thailland, where Sony has a factory. The cost of the restructuring of the company is also putting pressure on the income.
Sony Ericsson will soon cease to exist. Sony is buying out Ericsson, and will continue the smartphone business alone. Sony pays Ericsson 1.05 billion euros. Currently, the two companies have a 50 percent share in the joint venture. Ericsson therefore still bears half of the loss.