The mobile market is a highly competitive sector with various companies seeing its fortunes drop a great deal in recent times. Sony Ericsson may not be struggling but it may feel it needs to do more to keep up with the likes of Apple, and today we have news that Sony and Ericsson are going their separate ways after ten years in partnership.
Sony has revealed that they will take over Ericsson’s share of the mobile phone business, and to take full control themselves. Techradar are reporting that a statement by Sony said the business will now be “integrated into Sony’s broad platform of network-connected consumer electronics products.”
The company is going to pay €1.05 billion in cash to Ericsson for its half of the company, which has been rumored to be coming for a while now. The deal will end a ten year partnership between the companies, and Sony will be watching the likes of Apple and Microsoft emerging as a bigger threat to its position.
This deal also gives Sony control of five major patent families, as well as a broad IP cross-licensing agreement with the Swedish company. Sony’s Chairman Sir Howard Stringer said “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”.
Sony’s buyout could be the end of Ericsson’s part in the mobile market where it used to be a major player, and will now concentrate on its network infrastructure business. It will still have some dealings with Sony though as they work on wireless connectivity across multiple platforms.
Sony originally partnered with Ericsson to get itself into the mobile market, where previously it only had less than one percent of market share. Do you think Sony is taking a risk buying out Ericsson?