Sony Buys Out Ericsson for $1.47 Billion
October 27, 2011 9:46 AM
comment(s) - last by
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
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
This article is over a month old, voting and posting comments is disabled
RE: A move in the right direction.
10/27/2011 12:29:53 PM
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.
10/27/2011 8:26:26 PM
As well as a waste of money
"Let's face it, we're not changing the world. We're building a product that helps people buy more crap - and watch porn." -- Seagate CEO Bill Watkins
PlayStation Vita to Arrive February 2012
October 19, 2011, 10:14 AM
Sony Looking to Buy Ericsson Share of Mobile Phone Partnership
October 7, 2011, 12:28 PM
Most New Cell Phone Purchases are Smartphones in U.S., Says Nielsen
June 30, 2011, 4:50 PM
Sony Loses Yet More Customer Records, 3 More Sites Hacked
May 25, 2011, 8:16 AM
Sony Ericsson U.S. Head Steps Down
March 24, 2009, 1:46 PM
Buoyed by Strong iPhone Sales, Apple Reports Revenue of $42.1B, $8.5B in Profit for Fiscal Q4
October 20, 2014, 5:21 PM
Windows 8.1 + Android "Sell Mini PC" w/ Bay Trail Creates New PC Form Factor
October 20, 2014, 5:07 PM
OnePlus to Open Pre-orders on October 27
October 20, 2014, 1:34 PM
Apple Releases iOS 8.1; Adds Apple Pay Support, SMS Relay, Instant Hotspot
October 20, 2014, 1:00 PM
Quick Note: Android Gmail App to Gain Yahoo, Outlook Account Support
October 20, 2014, 9:15 AM
Forbes: Microsoft's Smartwatch to Launch Next Month
October 20, 2014, 8:36 AM
Most Popular Articles
Google Launches "Same-day Delivery" Subscription Service for $95/year
October 14, 2014, 10:37 AM
Google Announces Android 5.0 “Lollipop”, Nexus 9 Tablet, and Nexus 6 “Phablet”
October 15, 2014, 12:41 PM
Ireland to Close Loophole Apple and Google Used to Evade EU Taxes
October 13, 2014, 10:45 PM
Update: Motorola Droid Turbo Coming Oct 28, 48-hour Battery Life Confirmed
October 19, 2014, 9:19 PM
Samsung Develops 802.11 AD Wi-Fi, But Will it be Sunk by Poor Penetration?
October 14, 2014, 4:30 PM
Latest Blog Posts
The Surface Mini That Was Never Released Gets "Hands On" Treatment
Sep 26, 2014, 8:22 AM
ISIS Imposes Ban on Teaching Evolution in Iraq
Sep 17, 2014, 5:22 PM
Space Terrorism is a Looming Threat For the United States
Apr 23, 2014, 7:47 PM
Facebook Aims to Provide Internet to "Every Person in the World" with Drones, Satellites
Apr 1, 2014, 10:20 AM
Retail Mobile Sites Experience Outages in Light of Simplexity's Bankruptcy
Mar 14, 2014, 8:48 AM
More Blog Posts
Copyright 2014 DailyTech LLC. -
Terms, Conditions & Privacy Information