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25th June 2003

Europe : Sony Ericsson's application focused business strategy has started to drive market share growth in both the Japanese and GSM markets. Sony Ericsson's recent GSM-products have made a strong impact on the market and the recently introduced imaging phones for the Japanese market have broken new ground in mobile imaging.
In order to strategically focus Sony Ericsson's business on GSM/UMTS/EDGE and to further strengthen profitability, the following measures have been taken:

-- North American CDMA mobile phone operations to be phased out

-- GSM/UMTS R&D activities streamlined and Munich R&D-site closed

Sony Ericsson Mobile Communications has decided to prioritize development of its GSM/UMTS/EDGE business and discontinue the development of CDMA mobile phones for the North American market. Sony Ericsson remains committed to the continued development of CDMA phones for the Japanese market and CDMA machine-to-machine modules.

In addition, to further increase efficiency and productivity in Sony Ericsson's global R&D operations, GSM/UMTS R&D activities will be reduced to fewer sites. As a consequence, R&D activities in Munich, Germany will be phased out.

In total approximately 500 employees will be affected in Munich, Germany and at Sony Ericsson's CDMA R&D center in Research Triangle Park, North Carolina, USA.

"Today's announcement ensures the continued growth and development of Sony Ericsson. The actions reflect our strong forward momentum as we intensify our business focus and work to achieve profitability," says Katsumi Ihara, President of Sony Ericsson.