Sony to acquire Ericsson share of Sony Ericsson

Back on October 1st 2001, the Sony Corporation and Swedish telecommunications company Ericsson merged in a 50/50 partnership to build mobile phones, merging Ericssons mobile technology know-how and Sony`s brilliant consumer electronics reputation. Since then we`ve seen them release a number of products, most recently the Xperia lineup of Mobile Phones, of which the Xperia Arc is still Buzz`s pick for single core phone of 2011.

Today however they’ve announced that Sony will buy out Ericsson`s share of the joint venture. I contacted Sony Ericsson Australia for comment and they supplied the official press release :

Sony Ericsson can confirm that Sony Corporation and Telefonktiebolaget LM Ericsson have agreed and announced that Sony will acquire Ericsson’s stake in Sony Ericsson to make the joint venture as a wholly owned subsidiary of Sony. When the transaction closes, subject to normal regulatory approvals and necessary consultations, Sony Ericsson will become a standalone division within Sony Corporation. The Xperia Smartphone will serve as a cornerstone to Sony’s unique “four screen” proposition, integrating the Xperia Smartphone portfolio to its existing tablet, TV, videogame and personal computer businesses to deliver a more powerful “four screen” experience enabling a connected PC, TV, Tablet and Smartphone experience for consumers.

Sony just held a press conference at the companies headquarters in the UK, hosted by Sir Howard Stringer, Chairman, CEO and President Sony Corporation and Hans Vestberg, President and CEO, Ericsson. The highlights of the buyout are :

• Sony Ericsson to become a wholly‐owned subsidiary of Sony and integrated into Sony’s broad platform of network‐connected consumer electronics products
• Transaction provides Sony with a broad IP cross‐licensing agreement and ownership of five essential patent families
• Cash consideration of EUR 1.05 billion paid to Ericsson
• Ericsson and Sony to create wireless connectivity initiative to drive connectivity across multiple platforms

Timing considerations : Closing expected January 2012, subject to customary closing conditions, including regulatory approvals.

Sir Howard advised that for the time being the branding would remain the same and a task force would look into such things as branding, cross marketing and cross selling in terms of integrating with existing Sony products. They spoke at length during the presentation about Sony`s digital distribution options about how they own a Movie Studio and a Music label. During the Q&A someone asked if Sony would look into expanding to an Amazon style digital distribution system to other devices, Sir Howard dodged this with no definitive answer.

During the Q&A section, they advised that currently 80% of their phones are Android Smart Phones and that the remaining 20% which are feature phones would be phased out. Sir Howard did advise they would look at other mobile OS’s stating ‘Never say never’ but at this stage they can confirm they are definitely NOT looking at purchasing WebOS.

So basically we wait and see, they emphasised the whole way through the presentation that Ericsson would be maintaining a close relationship with Sony and that they would continue to work closely with each other. Whatever happens I can`t wait to see what new products and services this new company can deliver.