Move to integrate smartphone operation with tablet, gaming and PC units
Tokyo-based electronics company Sony will buy out Swedish telecom firm Ericsson’s 50% stake in the mobile phone joint venture they have operated since 2001.
The 1.05bn euros ($1.5bn; £964m) cash deal will make Ericsson a wholly-owned subsidiary of Sony. The deal is expected to enhance integration among the company’s diverse products.
Reuters quoted Sony chief executive Howard Stringer saying, "We can more rapidly and more widely offer consumers smartphones, laptops, tablets and televisions that seamlessly connect with one another and open up new worlds of online entertainment."
Both observers and the companies expected the deal. Earlier this month, CBR had reported that Sony has been considering the buy-out for a long time. A report from the Wall Street Journal had said that Sony-Ericsson is behind competition in making the transition from feature phones to smartphones. The report added that Sony’s inability to oversee mobile-phone development directly had become a hindrance in the development of modern phones.
Earlier, Stringer had said about the JV, "We talk a lot about this and we continue to talk."
Analysts believe that the deal is aimed to enable Sony integrate its smartphone operation with its tablet, game console and PC units, which have been kept separate until now. Moreover, by gaining full control of the 50-50 partnership, Sony could cut down costs and improve development of mobile devices as well.
The transaction will also give Sony ownership of certain handset patents held by Ericsson, which is expected to stand Sony in good stead in the increasingly hostile environment created by rival companies such as Apple, Samsung, Microsoft and Google.