Ericsson a Handset War Casualty

Waving the white flag amid a heated handset battle, Sony (SNE Quote) Ericsson (ERICY Quote) says it is closing its struggling CDMA business in the U.S.

The move Tuesday highlights Ericsson's continuing woes and comes on the same day that the wireless gearmaker said it would outsource the remainder of its computer services to IBM (IBM Quote).

Formerly one of the top three handset makers in the world, Ericsson, with its joint partner Sony, has quickly fallen to a weak fifth-place status. Compounding the Swedish tech outfit's problems is the drop-off in demand for wireless networking equipment, as telcos slow down their so-called 3G network upgrades.

Sony Ericsson says shutting down code division multiple access, or CDMA, operations will eliminate 500 jobs in Research Triangle Park, N.C., and in Munich. The company will continue to make its global systems for mobile or GSM phones. ...