Is It Time for Ericsson to Ditch Its Sony Partnership?

Sony CFO Nobuyuki Oneda said today that the joint handset manufacturing effort between Sony and EricssonĀ  will need to raise at least 100 million euros ($135 million) this year, according to the Nikkei English News. This prompted ratings agency S&P to issue a note saying that the telecommunications equipment vendor should sell its stake in its cell phone partnership with Sony:

We view this capital need as unsurprising given the weak recent results from SEMC and our forecast for further losses. We think the strategic value of SEMC to ERIC is minimal and believe a resolution requiring a cash infusion would be viewed negatively by ERIC investors.

Unfortunately, the note also explains that with the economy being what it is at the moment, and given the lackluster performance of Sony Ericsson handets, such a sale wouldn’t generate much. The partnership between Sony and Ericsson has been a rocky one. Ericsson makes the modules for Sony handsets and other devices. In August, Sony CEO Howard Stringer told a German paper he was unhappy with how things were going.

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