Ericsson announced today it is restructuring its core technology businesses, creating a new business unit devoted to multimedia application development and refocusing its R&D efforts by hiring 500 new engineers to work solely on new technologies.

On Jan. 1, Ericsson will have three core business divisions: Networks, Global Services and Multimedia, as well as its handset joint venture with Sony. As part of its reorganization, Ericsson plans to work more closely with the handset venture as well as work more with Sony on other technologies like IPTV, said Pia Gideon, vice president of external and market communications for Ericsson.

In fact, Sony Ericsson corporate executive vice president Jan Wäreby will take over as head of the new multimedia business unit, providing a close link between the applications side of the business and the handsets they run on.

“Multimedia is a key growth area,” Gideon said. “We’re really addressing the revenue side of the business.”

Separating multimedia from infrastructure, Gideon said, gives application developers much more latitude to create innovative features. Under the networks unit applications were driven by that division’s technology demands. Meanwhile the global services division is driven by efficiency. The logic behind developing applications is much different behind that of designing base stations and offering managed and hosted services, she said.

The 500 new engineers will not be attached to any particular division, but will be devoted purely to new research. Gideon said that during financially difficult times after the telecom bust, Ericsson laid off significant R&D staff. The new hires are intended to replace those resources now that the economics of the market and Ericsson’s own business prospects have improved.

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