Sony, planning to take control of ‘Sony Ericsson’ was reported to be on the talks for many months and finally, for $1.45 billion, the deal has been struck. Sony will take full control of the company (Sony Ericsson). The deal to be signed also gives them the right to use all patents owned by Ericsson, seamleslly across all products (tv, handhelds, phones) made by Sony.
“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,” Sony’s chairman and Chief Executive Sir Howard Stringer said in a statement.
Sony’s strength lies in consumer products wheras Ericsson is a big name in wireless network equipment business. Most of the expertise in making handsets came from Sony such as Cybershot for camera phones, Walkman for gaming phones and Playstantion for gaming phones. Sony was always in a dilemma of jointly sharing the fuits.
Samsung is another company whose more than the half of the revenues come from their phone business and Sony is now looking to replicate that same model for profits.
“As a major consumer electronics player lack of mobile assets had become a liability for Sony, particularly when compared with Samsung, whose telecommunication business creates nearly half of its profits,” Wood said.
It will be interesting to see the developmental manner in which Sony churns out new phones for consumers and what strategy they adopt to gain share.
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No. 11 2012 Issue