Print 11 comment(s) - last by Paj.. on Oct 28 at 7:40 AM

Sony has described the buyout as "magical"

Mobile devices like smartphones and tablets have become an essential part of many people's everyday lives, and for that reason, Sony is absorbing the entirety of its mobile partnership with Ericsson.

Reports in regards to Sony's interest in taking over started circulating earlier this month, with analysts estimating that the deal could be worth around $1.3 billion. But now, it has been announced that the buyout price is $1.05 billion euros, or $1.47 billion.

Currently, Ericsson phones have no connection with Sony's content despite the mobile joint venture between the two. Sony has a music label, a movie studio and of course the PlayStation gaming systems like PS3, PSP and the upcoming PS Vita. The company is looking to link this content with the Ericsson phones, much like Apple, which makes its own devices (i.e., the iPhone) and connects them with similar operating systems and programs, such as iTunes.

In fact, Sony is even beginning to sound like Apple, referring to the $1.47 billion buyout of Ericsson as "magical."

"It's the beginning of something which I think is quite magical," said Sir Howard Stringer, Sony chairman. "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 will receive ownership of five wireless handset patent families as well as an intellectual property cross-licensing agreement that covers all of the company's products and services. Stringer noted that ownership of such patents will lead to a reduction in costs in the way of operations, R&D and marketing.

In addition, Sony could potentially make up for Ericsson's loss in the smartphone race. But that doesn't mean that there aren't obstacles ahead for Sony.

"Sony had to make this deal as it had run out of options, but integration challenges could prove to be a major hurdle," said Ben Wood, head of research at consultancy CCS Insight. "As a major consumer electronics player, lack of mobile assets had become a liability for Sony, particularly when compared with Samsung, whose telecommunication business creates nearly half of its profits."

Hans Vestberg, Ericsson chief executive, plans to use the money from the buyout to "strengthen its balance sheet," but doesn't foresee paying it out to shareholders.

The next step will be to see if Sony can pull it off now that it has all the tools to launch a healthy competition against the likes of Apple and Samsung. But many are skeptical of Sony's abilities after the company took several security hits earlier this year from hackers who repeatedly targeted Sony.

Sources: Reuters, Huffington Post, PC World

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By cokbun on 10/27/2011 10:00:11 AM , Rating: 2
great. can i have froyo update for my X10 now ?

RE: great
By AMDftw on 10/27/2011 10:05:16 AM , Rating: 2
rolmao. froyo? Are you really that far behide?

RE: great
By Dr of crap on 10/27/2011 10:18:50 AM , Rating: 2
You're laughing at his froyo reference?
I still use XP on my 10 years PC - want to laugh at me to?

RE: great
By omnicronx on 10/27/2011 1:18:43 PM , Rating: 3
I think he is referring to the fact that Sony still has not released an update for an OS that was released over a year ago..

I don't think that was a personal attack..

(nor do I think anyone cares that you still use a 10 year old PC)

RE: great
By phantom505 on 10/28/2011 12:39:04 AM , Rating: 2
That explains quite a bit. I recommend finding a job so you can afford to move out of your Mom's basement... and coincidentally afford a computer that runs W7.

RE: great
By AssBall on 10/27/2011 10:21:01 AM , Rating: 2
Blame the hackers!

A move in the right direction.
By drycrust3 on 10/27/2011 11:44:10 AM , Rating: 3
Mobile devices like smartphones and tablets have become an essential part of many people's everyday lives

To stay as a major player in the manufacturing of mobile devices Sony has to release smartphones and tablets, and having to go to Ericsson to get their approval for every slight improvement would have been a handicap they don't need. Having a selection of games and access to their music and video libraries would definitely be good hook, especially to the young.
It will be very interesting to see what OS Sony opt for. With their experience with operating systems they could easily provide their own, which would fit in well with the games, but not having any application library would be a drawback in the longterm. I think this is the path they will go down though, because if they went down the path of Android then it is almost certain they would face litigation issues with Microsoft and Apple, and they would have to share their libraries with other Android users.
So that leaves them with a toss up between their own OS and Windows Phone 7.

RE: A move in the right direction.
By corduroygt on 10/27/2011 12:29:53 PM , Rating: 2
They're definitely not getting WP7. My guess is Android with custom Playstation App store for games is more likely. If not, they can try to buy WebOS, but that's a pipe dream.

RE: A move in the right direction.
By rudy on 10/27/2011 8:26:26 PM , Rating: 2
As well as a waste of money

RE: A move in the right direction.
By Paj on 10/28/2011 7:40:43 AM , Rating: 2
I dont think they will provide their own OS. WebOS has shown that theres only so much room for smartphone OSs, and WP7 has shown how hard it is for a company with decades of OS experience to get a new OS out. My guess is there will be even greater convergence between the PSP and smartphones like the Xperia play.

Android is turning into a pretty capable gaming OS. With a bit of nous and the right hardware, Sony they could make the best Android gaming phone around. The Xperia play was a step in the right direction, but it the hardware was underpowered. If they could make a PSP, running Android, that can be used as a phone, can run PSP games natively, and integrates with the PS3 - that would be a pretty killer product than many people would pay a premium for.

Great win for SONY!.
By fteoath64 on 10/28/2011 12:35:48 AM , Rating: 3
Basically, Ericsson is giving away their share of the company. A billion euro is hardly anything for the size of this company and its potential to grow with the market.

Some years back both companies injected 500M euro to save the company and that vanishes into thin-air fairly quickly. It took some time for SE to find its strengths and re-grow the way it should.

No doubt Sony with its varse resources in consumer electronics and gaming knows where it wanted without the shackles of Ericsson to approve any major decision. If SE stays away from MS for some time, it will do well for itself. They need to have another go at the tablet market and price their products more competitively. SamSung has proven to be a strong competitor so that is their target to beat.

"If they're going to pirate somebody, we want it to be us rather than somebody else." -- Microsoft Business Group President Jeff Raikes

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