Ericsson pulls phone plug

Published: 30 January 2001 y., Tuesday
Swedish telecoms equipment maker Ericsson said on Friday it was pulling out of making its own mobile phones after reporting a fourth-quarter group operating loss of 1.5 billion Swedish crowns ($155 million). Ericsson has been losing money on mobiles since the second quarter of 2000, citing component shortages and an uncompetitive product mix. As the losses mounted, pressure grew on Ericsson to sell or merge the handsets division with another mobile phone manufacturer. “Ericsson has decided to team up with Flextronics and transfer its complete supply chain for mobile phones ... leading to a rapid improvement of economies of scale a much smaller capital exposure and reduced risk,” Ericsson said in a separate statement. Ericsson also signed another agreement with Taiwan’s GVC to develop and produce phones.
Šaltinis: msnbc.com
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