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Sony In Talks To Buy Out Ericsson

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Sony and Ericsson have been enjoying their partnership for a decade now but it seems as if all is not well in the Eurasian marriage with reports suggesting the Japanese company is set to buy out the Sweden company.

Sony Ericsson has been producing phones since 2001 when they joined forces to take on the then-dominant Nokia but in recent years the partnership has failed to make a serious impact in the smartphone market and is currently the sixth largest manufacturer of mobile phones in the world.

The Wall Street Journal and Reuters have spoken to “people familiar with the matter” who say that Sony is “nearing a deal” to buy out the 50 per cent stake owned by Ericsson in the venture.

The move would allow Sony to fully integrate the smartphone side of the business with its recently released tablets, the up-coming PS Vita as well as its TV and console offerings.

Sony Ericsson Xperia Arc

Analysts have suggested that the deal could be worth in the region of $1.3 billion depending on what agreements the two companies reached about the continuing use of Ericsson’s telecoms patents.

Yoshiharu Izumi, an analyst at J.P. Morgan in Tokyo, 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."

Both Sony and Ericsson have not commented on the talks taking place with the Swedish company stating: "We have a long-term commitment to our joint ventures."

In terms of global mobile phone rankings Sony Ericsson has dropped from fourth position a couple of years ago to currently occupy ninth place.

The move would seem to make sense for Sony, considering the joint venture’s inability to gain a major slice of the smartphone market in recent years despite releasing flagship models such as the Xperia Arc.

With Sony Ericsson due to announce its third quarter results next week, we could be hearing more on the possible spilt very soon.

Source: Wall Street Journal and Reuters

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