Sony Ericsson denies reports that it is ending partnershp with DoCoMo

Wow, the Japanese handset market is really proving to be a tough nut to crack (a profit from, that is). With Sanyo (OTCPK: SANYY)’s recent exit from the mobile phone business, and Mitsubishi’s withdrawal from the handset game, it’s clear that even Japan’s larger handset makers are done with the grind that is the mobile phone industry.

The Japanese market isn’t as keen on the smartphones that are so popular in the US and Europe as they are with gimmicky feature phones that can take advantage of the island nation’s decidedly advanced wireless infrastructure. But, that poses a problem for firms like Sony Ericsson (NYSE: SNE). While Sony Ericsson enjoys wide success throughout the rest of the world with a marketable handset lineup, product development costs on specialized, single-market handsets are hard to recoup in an environment where the world’s No. 4 handset maker is ranks a lowly 6th place in Japan.

A Nikkei business report indicates that Sony Ericsson will stop developing handsets for DoCoMo after launching new devices this summer. Instead, Sony Ericsson is said to be planning to source handsets from other Japanese handset manufactures on an ODM basis and sold to DoCoMo as Sony Ericsson-branded devices.

Sony Ericsson spokesman Toshiyuki Kawamura denies the claims made in this report, saying that Sony Ericsson doesn’t intend to stop developing phones for DoCoMo and that there will be no outsourcing of handsets.

So, what are we to believe? Will Sony Ericsson stop developing handsets for DoCoMo but retain it’s KDDI partnership? Will SE exit Japan? Or is all this talk of market-surrender nothing more than baseless rumor?  We’ll have to wait and see.

[Via: Reuters]