Sony Ericsson dismisses split rumors; Loses its top US executive

Sony Ericsson

Struggling mobile handset joint venture, Sony Ericsson on Monday dismissed all the rumors about their split that surfaced after the joint venture reported that the decline in the demand of its phones could cause a substantial first-quarter loss of between $465 million and $533 million.

The two companies renewed their partnership vows. Sony stated that it's committed to the partnership. Sony spokesman said, "We will continue to be committed to the joint venture."

However, in a statement, Sony Ericsson stated that Najmi Jarwala, president of Sony Ericsson USA and head of the company's North American operations is leaving Sony Ericsson "to pursue other career opportunities".

Najmi Jarwala decided to go just two days after the JV announced a worse-than-expected first-quarter loss. Jarwala stated that he will be leaving the company at the end of March, and Anders Runevad, executive vice president of Sony Ericsson and Global Sales & Marketing chief, will take care of the responsibilities of his post, from next month, until the company finds a suitable person to fill the post.

In a statement, Jarwala said, "We have introduced an increasing number of new products, grown market share, built operator relationships and, perhaps most importantly, have laid the foundation for North America to play a key role in the long term growth and success of Sony Ericsson."

The rumors of Sony Ericsson split came up late last week, after the JV admitted that it expects the loss between $460 million and $528 million in the 1st Q of the year, in the wake of declining demand for its phones.

Sony Ericsson handset business flourished in 2007 on strong Walkman and cell phone camera sales, but the demand of its phones declined last year. Its Cybershot and Walkman phones saw some success in United States, but that wasn't enough to match up with Apple's iPhone and RIM's BlackBerry. Sony Ericsson's Windows Mobile-based Xperia X1 was able to get positive reviews in United States, but no US carrier came forward to offer the phone. Sony Ericsson's poor performance in United States could be one of the major factors responsible for Najmi Jarwala's exit.

Sony Ericsson also suffered losses in European and Asian markets; the sales of its phones declined in European and Asian markets, where the Sony Ericsson phones were edged out by the Nokia devices.