By Claire Reilly
Sony Corporation has today announced that it will be acquiring Ericsson’s 50 per cent stake in Sony Ericsson Mobile Communications, which will bring the mobile handset business completely under the Sony umbrella as a wholly-owned subsidiary. As a part of the transaction, Ericsson will receive a pay out of more than €1 billion.
“This acquisition makes sense for Sony and Ericsson, and it will make the difference for consumers, who want to connect with content wherever they are, whenever they want,” said Sony chairman, CEO and president, Sir Howard Stringer.
In a statement from the company, Sony conceded that the mobile phone landscape was changing and that more handsets were incorporating access to internet services and content. “This means that the synergies for Ericsson in having both a world leading technology and telecoms services portfolio and a handset operation are decreasing.”
“With a vibrant smartphone business and by gaining access to important strategic IP [intellectual property], notably a broad cross-license agreement, our four-screen strategy is in place,” added Stringer.
“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. This includes Sony’s own acclaimed network services, like the PlayStation Network and Sony Entertainment Network.
“We can help people enjoy all our content – from movies to music and games – through our many devices, in a way no one else can.”
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As Sony and Ericsson part ways (the deal is expected to be finalised by January 2012), Ericsson will gear its focus more towards advancing its wireless technologies.
“Ten years ago when we formed the joint venture, thereby combining Sony’s consumer products knowledge with Ericsson’s telecommunication technology expertise, it was a perfect match to drive the development of feature phones,” said Ericsson's president and CEO, Hans Vestberg.
“Today we take an equally logical step as Sony acquires our stake in Sony Ericsson and makes it a part of its broad range of consumer devices. We will now enhance our focus on enabling connectivity for all devices, using our R&D and industry leading patent portfolio to realize a truly connected world” he said.
When the partnership between the two companies began in 2001, it “combined the unprofitable handset operations from Ericsson and Sony”. Over the years, the union thrived and brought out a range of models including Walkman Phones and CyberShot Phones, the P1 smartphone in 2007 and, more recently, the Xperia Play.