Arima to build Ericsson phones

STOCKHOLM: Swedish telecommunication equipment maker Ericsson said on

Thursday it had signed an agreement with Taiwan's Arima to develop and make new

entry-level mobile phones.

"This agreement is an important part of our new entry level strategy,

which will help us to reduce cost and time to market and thereby increase

profitability," Ericsson vice president for consumer products Jan Wareby

said in a statement.

Ericsson’s consumer products division, mainly mobile phones, was the only

one to report an operating loss in the first half of the year, which the company

to a large extent blamed on a components shortage because of a fire at a

supplier's factory.

But it also said it did not have a wide enough range of cheap mobile handset

models that could be delivered to the market fast enough.

Outsourcing is an important part of the strategy of Ericsson, the third

biggest mobile phone maker, in order to cut costs and expand in the mobile phone

market.

(C) Reuters Limited 2000.