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.
10/28/2011 7:40:43 AM
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.
“And I don't know why [Apple is] acting like it’s superior. I don't even get it. What are they trying to say?” -- Bill Gates on the Mac ads
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
MSI's AMD Richland (A10)/Neptune (7/8xxxM) Gaming Notebooks Start at $1,299 USD
May 22, 2013, 3:15 PM
Apples Tries to Use Decade-Old Patents to Ban Samsung Galaxy S IV
May 22, 2013, 3:00 PM
Intel Shake-Up to Focus on Mobile, New Devices
May 22, 2013, 11:04 AM
Report: DISH CEO Makes Aggressive $2B USD Bid for LightSquared's Spectrum
May 20, 2013, 10:25 PM
Apple Releases Tim Cook's Testimony on Corporate Tax Laws
May 20, 2013, 7:40 PM
Apple's Tim Cook to Talk Profit Shifting, Taxes at U.S. Senate Hearing
May 20, 2013, 1:44 PM
Most Popular Articles
High School Student Creates Storage Device that Can Charge in 20 Seconds
May 20, 2013, 6:51 AM
Seawater Cooling Saves Data Center Big Bucks, Energy, Despite Jellyfish Issues
May 17, 2013, 3:23 PM
Newegg Legal Chief: "We don't Feed the Trolls"; Defeats Bell Lab Shell Comp.
May 17, 2013, 10:11 AM
Former Intel CEO Regrets Passing Up on iPhone Gravy Train
May 17, 2013, 11:46 AM
NASA Awards $125,000 Grant for 3D Printed Food on Long-Term Space Travels
May 21, 2013, 1:32 PM
Latest Blog Posts
Lumosity: Does it Work?
May 22, 2013, 8:20 PM
Quick Note: Sony "Teases" PS4 Ahead of Xbox Reveal in New Video
May 20, 2013, 12:33 PM
Nokia Introduces Instagram-Like App of Its Own to Help Lumia Sales
May 20, 2013, 7:10 AM
Parents of Pre-Teen Drivers Commonly Practice Distracted Driving Says Study
May 9, 2013, 7:16 AM
Apple's iOS 7 Running Into Internal Delays Due to Massive Overhaul
May 1, 2013, 4:26 PM
More Blog Posts
Copyright 2013 DailyTech LLC. -
Terms, Conditions & Privacy Information