Sony Buys Ericsson – Out Of Mobile Phone Joint Venture

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Sony Ericsson, founded in 2001, initially thrived with an array of camera and music phones, but later lost out in the smartphone race. Now, Sony Corp is taking over the Sony Ericsson mobile phone joint venture for 1.05 billion Euros ($1.45 billion) as it seeks to catch up with smartphone and tablet makers such as Apple and Samsung.

The deal to buy out its Swedish partner gives Sony ownership of certain handset patents held by Ericsson and will enable it to integrate the joint venture’s output with its own range of products and content. 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, Sony’s chairman and chief executive Sir Howard Stringer, said in a statement.

Until now Sony’s tablets, games and other cosumer electronics devices have been kept separate from the phones sold and created by Sony Ericsson. Since television sales are set to fall, smartphones look to become more important products for Sony since their sales are rising globally and they will probably become the main device people use to connect to the internet, said analysts Nobuo Kurahashi of Mizuho Investors Securities in Tokyo.

Smartphones sales have been surging since Apple launched its  first iPhone in 2007 and despite a slowdown in the overall consumer electronics market, the strong demand for smartphones is expected to continue. Ericsson said the deal provides Sony with a broad intellectual property cross-licensing agreement covering all the Sony company’s products and services as well as ownership of five essential patent families relating to wireless handset technology.

The takeover of Sony Ericsson by Sony had long been talked of, and a source with direct knowledge of the matter said this month that a deal was in the offing. Sony now has all the components to compete with Samsung and Apple. How effectively and aggressively they are able to compete, only time will tell.

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