Sony Corp has bought Ericsson’s stake in the Sony-Ericsson joint venture for a reported US$1.45 billion, equipping it with valuable patents and the potential to tie in multiple Sony services.
|Sony Ericsson’s Flagship Arc|
“Its the beginning of something which I think is quite magical,” said Sir Howard Stringer, Sony’s chairman and chief Executive.
“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 Ericsson’s mobile phone range has remained independent from Sony products, although recently Sony’s PlayStation, Qriocity and additional software has seeped through the joint company’s phones.
“Sony is looking to do the same as Apple and meet user’s demands through linking various devices with similar interfaces and operating systems,” said analyst Nobuo Kurahashi of Mizuho Investors’ Securities in Tokyo.
“Since television sales are set to fall smartphones look to become more important products for Sony since their sales are rising globally and they will probably become the main device people use to connect to the Internet.”
Ever since 2007 smartphone sales have been on the rise, with Apple’s iPhone leading the trend, proving a phone can successfully converge different technologies, such as games, cameras and music. Sale momentum is expected to continue.
Over the last month there has been speculation of such a takeover in the works, with an informed source leaking the deal to Reuters.
“Sony now has all the components to compete with Samsung and Apple. The big question now is … can it execute ?,” said Pete Cunningham of industry consultancy Canalys.
“Based on history I am skeptical but I would not say it cannot be done.”
Ericsson claims Sony also benefit from a vast intellectual property portfolio that covers all of its products, with “five essential patent families relating to wireless handset technology.”
Sony Ericsson was founded in 2001 and thrived on the back of strong camera and music phones, but has recently lost market share amidst the smartphone frenzy. Up until recently, all handsets have been branded Sony Ericsson, although the release of two Sony branded tablets could indicate the deal has been in the works for some time.