Japan’s Sony has confirmed recent speculation that it may need to sink investment into Sony Ericsson during its current financial year to prop up the loss-making handset joint-venture. A Sony spokeswoman told Reuters that Sony Ericsson will likely seek at least EUR100 million in funds by March next year. The development confirms recent speculation that the handset vendor is looking to raise funds either via bank loans or a cash injection from the parent companies. Recent reports suggest that Sony and its joint partner in the venture – Sweden’s Ericsson – are preparing to each invest a further EUR500 million in Sony Ericsson by year-end. The Sony spokeswoman, Mami Imada, said that details of the fund raising will be jointly decided by the two parent companies.

Sony Ericsson recently announced plans to cut a further 2,000 jobs off the back of a first-quarter pretax loss of EUR358 million. Meanwhile, new data from Gartner this week revealed that the vendor continued to lose market share as sales slipped from 22 million in 1Q08 to 14.5 million in 1Q09. This contraction saw its market share slip from 7.5 percent to 5.4 percent, and its ranking drop to fifth place behind Motorola (see lead story). The situation has led to speculation that one or the other of the parent companies could sell its stake in the venture. A report this week by equity research house S&P suggested that Ericsson could sell its stake to Sony as an alternative to further investment in the venture, but warned that such a deal would bring Ericsson “limited proceeds given the venture’s current market position and expected losses.”