Ericsson withdraws from Sony Ericsson

Stephen Withers
Friday, 28 October 2011 08:05

IT Industry - Listed Tech

 

Sony will pay €1.05 to take full control of the Sony Ericsson handset business, including 'essential patents'.

 

A decade ago this month, Sony and Ericsson pooled their mobile phone resources. Sony contributed its consumer products expertise, while Ericsson provided its deep engineering skills.

 

But the world has changed since then, and customers are increasingly opting for smartphones rather than feature phones, making an ecosystem including content and services more important. At the same time, Ericsson receives a diminishing benefit from being involved in handsets as well as providing wireless technology and services to operators.

Consequently, Sony Ericsson will become a wholly-owned subsidiary of Sony. The deal includes a broad intellectual property cross-licensing agreement and the transfer of "five essential patent families relating to wireless handset technology" to Sony.

Ericsson receives €1.05 billion for its 50% stake in Sony Ericsson. That's on top of the €0.95 billion in dividends it has received over the ten years of the joint venture. Since the two individual companies were losing money on their handset operations, the partnership must be considered a success, even if Sony Ericsson has only been able to garner 11% of the Android phine market.

Sony intends to integrate smartphones into its other networkable consumer devices including TVs, tablets and PCs. Sony chairman, CEO and president Sir Howard Stringer said the acquisition cements the company's four-screen strategy. "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. This includes Sony's own acclaimed network services, like the PlayStation Network and Sony Entertainment Network," he said.

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