One thing that always confused me is whether it is ‘Sony Ericcsson’ or ‘Sony Ericsson’? Well, it doesn’t matter anymore. Because there will be no Sony Ericsson mobile phones in the market anymore. The Swedish company Ericsson has sold its 50 percent stake in Sony Ericsson to Sony for $1.46 billion. The deal is expected to close in 2012. The move was very much anticipated as the mobile manufacturer was reeling under recession and declining sales. Now, Sony Ericsson will become a wholly owned subsidiary of Sony and integrated into Sony’s platform of network-connected consumer electronics. Single ownership enables Sony to integrate their smartphones with their consumer electronics products. You might see an integration of Sony smartphones with PlayStation, tablets, laptops, televisions and other Sony platforms.
Under the deal, Sony will gain ownership of five patent families relating to mobile handset technology and a broad intellectual property cross-licensing agreement. Industry experts say that the move is going to help Sony Ericsson to become more competitive in the smartphone market. Sony Ericsson adopted android in 2008 and has 11 percent control over the smartphone market worldwide. In the 11 percent, Xperia smartphones account for 80 percent sales.
The shareholders of both the companies have taken the deal positively. Ericsson shares went up by 5.1% and Sony stock rose by 5.4%. The move will now enable Ericsson to focus on its core wireless equipment business. Ericsson and Sony started the joint venture ten years ago on 1 October 2001 combining their expertise in respective fields. The venture was a huge success in the beginning but fell short in the competition with smartphone manufacturers like Samsung and Apple.
Now, what can we expect? I think we will get to see far better smartphones from Sony, which will be integrated with their other platforms. Sony has pulled their socks up and decided to give it a fight. Sony is going to come out with all guns firing and they have decided to stop the production of normal 3G phones by 2012 and focus entirely on smartphones.
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