Sony and Ericsson toy with tie-up

Neither company disclosed whether concrete plans have been forged, but according to the Jiji press news agency in Japan the two companies are expected to announce a joint venture in the UK in the not to distant future.

Schema analyst David Brown believes this alliance would benefit both companies, allowing Ericsson to benefit from Sony's current technology, which will feature in future devices and allow Sony a stronger presence in Europe.

"We're going to see more differentiation in the market as 3G phones will have particular features to suit particular customer requirements, some will have MP3 players or PDA-like features, where others will be straight phones," he said.

Ericsson recently announced it is pulling out of mobile handset production, while Sony has stated it wishes to gain a stronger presence in both Japan and Europe having pulled out of the mobile sector in the US in 1999.