Benedikt Kammel, Bloomberg
Sony Ericsson Mobile Communications Ltd. will use components and software made by Sagem Communication to expand its range of cheaper mobile phones to broaden its product range and step up competition with Nokia Oyj.
Sony Ericsson will receive the license to use hardware and software made by Sagem, a unit of Paris-based Safran SA, and also gain “a number” of handsets that will carry the Sony Ericsson brand, the company said in an e-mailed release today. Sagem and London-based Sony Ericsson, the world’s fourth-largest mobile- phone maker, will also set up a development center in France.
“Through this co-operation, Sony Ericsson will be able to complete its entry level product offering and strengthen its position in this area of the market, whilst at the same time benefit from the technical know-how and the engineering capacity of Sagem,” Sony Ericsson said.
The Sagem cooperation is a step away for Sony Ericsson from its focus on expensive phones that use components such as high- resolution cameras and music players to woo buyers. Nokia of Finland has also added more low-cost handsets as demand from India, China and eastern Europe grows at a faster pace than more saturated regions such as Western Europe or Japan.The companies didn’t give financial details of the cooperation, which Sagem in the statement called “long-term.”
Sony Ericsson is a 50-50 venture between Stockholm-based Ericsson AB and Tokyo-based Sony Corp.
Safran was formed in the May 2005 merger of Paris-based engine-maker Snecma SA with Sagem SA, France’s second-largest defense-electronics company. The mobile-phones business that was part of Sagem has been suffering from competition against competitors such as Nokia and Motorola Inc., leading Safran to say it will consider options, including selling the unit.