Manufacturing News

Sony Ericsson to Buy Half of Its Handset Components From China

Sony Ericsson Mobile Communications Ltd.said half of the handset components it buys this year will be purchased from China.

June 6 (Bloomberg) -- Sony Ericsson Mobile Communications Ltd., the world's fifth-biggest maker of cellular phones, said half of the handset components it buys this year will be purchased from China.

The London-based company bought 22 billion yuan ($2.7 billion) worth of components through its Beijing procurement center in 2005, Sony Ericsson said on its China Web site. It didn't give a figure for global procurement last year.

Sony Ericsson is buying more components from China to take advantage of cheaper prices and lower labor costs in the world's most populous nation. Cutting costs may help the mobile-phone venture between Sony Corp. and Ericsson AB compete for market share with Nokia Ojy and Motorola Inc.

Sony Ericsson is expanding and hiring employees for its Beijing center, said Michael Ning, a company spokesman in the city.

The mobile-phone maker procured 5 billion yuan worth of components from China in 2003 and 10.5 billion yuan in 2004, Sony Ericsson said.

Components bought in China will be used in local mobile- phone production and will be shipped to Sony Ericsson's other plants worldwide via Hong Kong, Ning said. About a third of all the company's handsets were produced in China last year, he said. Sony Ericsson currently has two plants in the country, both in Beijing.

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