June 25, 2003, 9:23 AM — Users of mobile phones in North America will see less of Sony Ericsson Mobile Communications AB, following a decision to drop a key product line in the region.
The company, a joint venture between Sweden's Telefonaktiebolaget LM Ericsson and Japan's Sony Corp., has decided to phase out production of handsets based on CDMA (Code Division Multiple Access) technology in North America and focus instead on phones using GSM (Global System for Mobile Communications) and 3G (third-generation) technologies, Sony Ericsson said Tuesday in a statement.
GSM is the most widely used mobile phone technology in the world and one in which Sony Ericsson holds a relatively strong position. The U.S. is one of the few countries in the world where rival CDMA technology has achieved a higher market penetration, thanks in large part to local manufacturers including Qualcomm Inc. and Motorola Inc.
Despite its retreat from North America, Sony Ericsson will continue to develop and market CDMA phones and CDMA machine-to-machine devices for the Japanese market, the company said.
As part of its ongoing efforts to streamline operations, Sony Ericsson has also decided to close its CDMA-focused research and development center in North Carolina and another in Munich, affecting about 500 people.
The moves aim to help the company achieve profitability, said Sony Ericsson President Katsumi Ihara in the statement.
Katsumi needs to take quick action; Sony Ericsson has been performing poorly in recent months. The company saw first-quarter net sales fall 28 percent year-on-year to