Sony takes charge of Sony Ericsson
2011-10-27 12:32
Cape Town - Sony Ericsson has announced that Sony has bought out partner Ericsson in the joint venture between the two companies.
"Sony Ericsson can confirm that Sony Corporation and Telefonktiebolaget LM Ericsson have agreed and announced that Sony will acquire Ericsson's stake in Sony Ericsson to make the joint venture as a wholly owned subsidiary of Sony," the company announced.
A deal has been rumoured for some time and it is expected that Sony will leverage a range of new mobile devices under the Xperia brand to drive sales.
"The Xperia Smartphone will serve as a cornerstone to Sony's unique 'four screen' proposition, integrating the Xperia smartphone portfolio to its existing tablet, TV, videogame and personal computer businesses to deliver a more powerful 'four screen' experience enabling a connected PC, TV, tablet and smartphone experience for consumers," the company said.
Sony Ericsson was established in 2001 and had been struggling recently to match sales with hot-selling devices from Samsung in the fight with Apple for the crown of mobile smartphones.
Brand visibility
Under the deal, Sony will get a broad IP cross-licensing agreement from Ericsson and the cash settlement is €1.05bn.
Sony has, like its South Korean competitor, thrown its weight behind Google's Android platform for its devices and this may reduce its brand visibility.
However, Android remains important to Sony's plans for mobile devices.
"We see the Android operating system as bring us to the race, we have to have it to play in the race," said Colin Williamson, marketing manager for Sony Ericsson South Africa recently.
To differentiate from the global Android market, it is expected that there will be better synergy between mobile devices and entertainment content from Sony to drive sales.
"The whole thing behind our Xperia brand is that we want them to be the most entertaining smartphones," said Williamson.
"The timing of this is kind of perfect. It's not entirely a co-incidence, but the Sony Entertainment Network will deliver an enormous amount of entertainment globally, more easily than anybody else," said Sir Howard Stringer, Sony CEO.
He said that despite the brand lagging behind rivals, the combination of Sony content and mobile devices would soon make an impression in the market.
"The fact that we've tied all this together with this deal - the last piece of the puzzle if you like - makes us very optimistic that we can catch up very quickly."
- Follow Duncan on Twitter