Ericsson chief executive Carl-Henric Svanberg said partner Sony would be a logical buyer for Ericsson's half of handset making joint venture Sony Ericsson, the Financial Times reported on Thursday.
Steep losses from the venture have spurred investor talk the parents were agonizing over the future of their offspring.
However, both companies told the paper they were ready to inject more money into the venture if needed.
Sony Ericsson, the world's fifth largest cellphone maker, is suffering from its strong focus on music and camera phones, which have been hurt the most in the economic downturn, and it has said it would focus more on top-end smartphones.
Sony Ericsson said in April it would stick to its plans to use three different operating systems -- Symbian, Google's Android and Microsoft's Windows Mobile -- to make smartphones.
In the midst of recession and shrinking cellphone demand its three-way bet is seen as too costly in the market and Sony Ericsson's chief Hideki Komiyama told the Financial Times the company may cut the number.
Komiyama hinted Microsoft's position would be unsure on the list, calling X1, its only Microsoft phone so far, a kind of experiment.
Sony Ericsson has benefited over the years from Sony's Walkman and Cybershot brands and Komiyama said also gaming phones, using Playstation brand, could happen. (Reporting by Tarmo Virki; Editing by Dan Lalor)