Sony takes 100 per cent ownership of Sony Ericsson

By
Julien Theys

October 27, 2011

Sony will acquire Ericsson's 50 per cent stake in Sony Ericsson, making the mobile handset business a wholly-owned subsidiary of Sony.

Sony will pay Ericsson €1.05 billion in cash and will be covered by an intellectual property (IP) cross-licensing agreement covering all products and services of Sony as well as ownership of five essential patent families relating to wireless handset technology.

From its peak of over 100m handsets shipped in 2007, Sony Ericsson saw a sharp decline and will end 2011 shipping less than 40m units during the entire year.

Sony's takeover of its own smartphone destiny was a much-anticipated move.

By Ericsson's own admission, the synergies for Ericsson in having both a telecoms services portfolio and a handset operation have significantly decreased.

For Sony, a wholly controlled smartphone operation is critical to grow in a consumer electronics market that is constantly 'cannibalised' by smartphones. Handheld gaming, point-and-shoot cameras or even alarm clocks are examples of Sony strongholds that are challenged by the smartphone revolution.

From a marketing perspective, it will also be easier to integrate Sony's other assets, such as the PlayStation and Bravia brands as well as content services like Qriocity that are critical to compete in the current ecosystem-driven smartphone market.

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