Sony Looking to Buy Ericsson Share of Mobile Phone Partnership
October 7, 2011 12:28 PM
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Sony Ericsson Xperia Play
Deal could be worth $1.3 billion to Ericsson says analyst
In the smartphone world, there are several players out there and many of them are banking on the popularity of Google’s Android operating system for continued success.
was one of the firms that came later to the Android game.
reports that Sony is in talks to buy out the Ericsson stake in the mobile phone company. That would mean the smartphones would be solely under the Sony brand. Considering one of the more interesting smartphones to come out of the partnership between the two firms was the
that is heavily focused on gaming, it's not surprising that Sony want the devices under its own brand.
Right now, Sony makes tablets, music players, and computers under its name and the only products offered under the Sony-Ericsson brand are mobile phones. According to
, the negotiations with Sony and Ericsson have been ongoing for weeks. The Sony Ericsson brand is a 50:50 joint venture and the decade-long deal that started the venture must be reapproved this month.
A source close to the deal that Sony was talking buyout as of Friday. The deal could net Ericsson $1.3 billion depending on what the telecom patents Ericsson holds and uses in the smartphones are worth according to analyst Yoshiharu Izumi of J.P. Morgan in Tokyo.
Izumi said, "Up to now Sony's products and network services have all been separate. Unifying them would be positive. If they can leverage their games and other network services I think they can lift their share."
The Sony Ericsson venture has reportedly turned a profit of 90 million euros as of last year after a massive loss of 836 million euros in 2009. However, its share of the cell phone market has dropped from fourth place to 9th place in only a few years time.
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10/7/2011 6:27:48 PM
Good move, by Sony. Unifying the brand under their own name and giving themselves more control over the future should make them more competitive. Their recent phones have been solid against the likes of Apple and Samsung. Fully integrating their PSP into new phones would give them a huge advantage over their competitors. Gaining new subscribers at a young age through Playstation games vs the dinky apps that we have now could also help leverage their brand name into the future adult market. The Xperia Play is just a limited overpriced, nice idea right now, but it has potential.
"Paying an extra $500 for a computer in this environment -- same piece of hardware -- paying $500 more to get a logo on it? I think that's a more challenging proposition for the average person than it used to be." -- Steve Ballmer
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