How do I resolve the issue of my 3yo's best friend physically hurting him every time they're together?

They are both exactly the same age, and have grown up together since they were a couple of months old. My son has always been the quiet one, my friend's son has always been the louder, more physical boy. Over the last 12 months, my son's friend has been a bit of a Jekyll & Hyde - seeming to fly into a rage without warning. He started by pushing my son, and over the next few months turned into hitting him in the arm. Now it has escalated to punching in the face and head, biting, kicking, and throwing things at my son. Then in the next minute, he's hugging him, kissing him, and telling my son that he loves him. Now, I realise they are both 3 years old, but I am really worried about what might happen next. My son came home today with a black eye and swollen cheek, in an absolute state. I have mentioned it to my friend, and she said they are addressing it by telling their son it is wrong and putting him in the naughty corner for 2 minutes time out. I don't think this is working, given he now just does whatever he wants and then takes himself off to his naughty corner quite happily without being told. What do I do? I don't want to lose my friendship, but I'm damned sure I don't want my son being a punching bag either.