Sony Plans to Acquire Ericsson's Share in Sony Ericsson Joint Venture - Report

Sony Wants to Regain Full Control of Mobile Phones Business Units

by Anton Shilov
10/09/2011 | 06:09 PM

Sony Corp. intends to gain the full control of is mobile phones business by acquiring Ericsson's stake inside their Sony Ericsson joint-venture. Potentially, the move should help Sony to quickly integrate its software and hardware innovations into smartphones.

 

The two companies - each of which controls 50% stake in Sony Ericsson - are negotiating over the price that Sony could pay for Ericsson's telecom know-how, which would be the price of Ericsson's stake in SE, according to a story by the Wall Street Journal. Analysts estimated that the Stockholm-based company's stake could be valued between €1 billion and €1.25 billion, or about $1.3 billion to $1.7 billion.

The reasons why Sony wants to get its share from Sony Ericsson are more or less clear. The handset maker has been losing market share for some time now and it will continue to as the popularity of higher-end feature phones is declining while the popularity of Xperia smartphones remains low. Sony also has dropping market shares in its media player, consumer camera and some other businesses, where application-specific smartphones could help to fight back the revenue from smartphones like Apple iPhone.

Moreover, as most of today's companies, Sony sees smartphones as an integral part of its tablet, PC and video game consoles businesses. Provided that all the mobile devices are developed under one roof, they could support identical services and have similar or complementary capabilities.

For Ericsson, handsets have lost importance as a way to entice mobile-phone operators to buy its telecommunications-network equipment. The consumer-focused cellphone business also runs contrary to Ericsson's engineering-heavy, business-to-business focus.

Sony Ericsson Chief Executive Bert Nordberg said in an interview last week that the joint venture has "more in common" with Sony than Ericsson.

Neither Sony nor Ericsson commented on the news-story.