Sony pays €1bn to take charge of Sony Ericsson

 

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By Barry Collins

Posted on 27 Oct 2011 at 09:23

Sony is paying Ericsson a €1 billion to buy out its share of the Sony Ericsson joint venture.

Sony will take sole control of the mobile phone firm - which was previously owned 50/50 by the two companies - in a bid to better integrate smartphones into its full range of consumer devices.

It's the culmination of Sony's so-called "four-screen strategy", which sees the company deliver hardware and services across smartphones, PCs, televisions and tablets.

Sony chairman Sir Howard Stringer said the deal will allow the company to act more nimbly and cost effectively in the smartphone market.

This acquisition makes sense for Sony and Ericsson, and it will make the difference for consumers

“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," he said.

"With a vibrant smartphone business and by gaining access to important strategic IP, notably a broad cross-license agreement, our four-screen strategy is in place," he added. "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."

Stringer hopes this ability to spread services across multiple devices will help Sony compete with Apple and the raft of Android handset manufacturers. “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,” claimed Sir Howard.

Bit-part player

Sony has much work to do reverse the fortunes of the smartphone venture. IDC figures for the second quarter of 2011 give Sony Ericsson a worldwide market share of only 2%, leaving it outside the world's top 10 handset manufacturers. Sony's own figures claim it has a market share of only 11% in the Android handset market.

Sony and Ericsson formed its joint venture in October 2001, and was soon producing some of the best smartphones in a fledgling market - such as the Sony Ericsson P800 - but the company has struggled to replicate that success in recent years.

The deal will see Sony take ownership of "five essential patents families relating to wireless handset technology".