Troubles in Ericsson's mobile phone business

In the United States, Ericsson partnered with General Electric in the early nineties, primarily to establish a US presence and brand recognition.
Ericsson had decided to source on chips for its phones from a single source, a Philips facility in New Mexico. In March 2000, a fire at the Philips factory contaminated the sterile facility. Philips assured Ericsson and Nokia (the other major customer of the facility) that production would be delayed by less than a week. When it became clear that production would actually be compromised for months, Ericsson was faced with a serious shortage. Nokia had already begun to obtain parts from alternative sources, but Ericsson's position was much worse as both production of current models and the launch of new ones was held up.
Ericsson, which had been in the cellular phone market for decades and was the world no. 3 cellular telephone handset maker was struggling with huge losses in spite of booming sales since 2000 due to this fire and its inability to produce cheaper phones like its competitor Nokia
. To curtail the losses, it was thinking of outsourcing production to Asian companies that can produce the handset for lower costs.