Sony is to pay Ericsson more than €1bn to gain control of the companies’ 50-50 joint venture for mobile phones and tablets, Sony Ericsson.
LM Ericsson and Sony will now go separate ways, ending a decade-long mobile phone manufacturing partnership.
The move will mean mobile maker Sony Ericsson will become a wholly owned subsidiary of Sony and integrated into Sony’s platform of network-connected consumer electronics products, the Japanese company and Swedish wireless equipment firm said.
The transaction gives Sony an opportunity to integrate smartphones with consumer electronics devices, such as tablets, televisions and personal computers, the companies said.
The move was widely anticipated by analysts, who have argued Sony Ericsson could become more competitive in the tough smartphone market under sole Sony ownership.
The €1.05bn (£919m) cash deal, expected to close in January, lays out a broad cross-licensing agreement between Sony and Ericsson.
It also gives Sony ownership of five “essential” patent families that belonged to Ericsson, but did not specify which patents are involved.
“This acquisition makes sense for Sony and Ericsson, and it will make the difference for consumers, who want to connect with content wherever they are, whenever they want,” Sony chief Howard Stringer said in the statement. “With a vibrant smartphone business and by gaining access to important strategic IP, notably a broad cross-licence agreement, our four-screen strategy is in place.”
Sony’s four-screen strategy entails smartphones — Sony Ericsson said this month that it would next year stop making any other kind of phone — as well as laptops, tablets and TV sets. Stringer said the buyout means Sony can allow those devices to connect with each other more effectively and to interoperate with the PlayStation Network and Sony Entertainment Network.
“We can help people enjoy all our content — from movies to music and games — through our many devices, in a way no one else can,” Stringer noted.
Sony Ericsson’s latest devices include the Xperia Arc S smartphone, and the Sony P and S tablets, all of which run Google’s Android OS.
Stockholm-based Ericsson’s divestment of its share in the joint venture will let it “focus on enabling connectivity for all devices, using our R&D and industry-leading patent portfolio to realise a truly connected world”, Hans Vestberg, chief executive of Ericsson, said in the companies’ statement.
According to research firm Gartner’s most recent figures, Sony Ericsson was 10th in global mobile device sales in the second quarter, with a 1.7-percent market share. A year before, its share was three percent.
