Sony Nears Unwind Venture with Ericsson
As the market is overwhelmed by Apple, Blackberry and many other smartphone applications, lesser people are remembering that Sony Ericsson is yet in the telecommunication field. With the 50-50 joint venture of Sony Corp. and Telefon AB L.M. Ericsson, this decade-old brand name is the world’s sixth largest mobile phone manufacturer.
Currently, Sony Corp. wishes to run deeper into smartphone world. It is negotiating a deal to buy out Ericsson’s business stake, according to a news report in The Wall Street Journal. Sony, Tokyo-based electronics maker, believes that it would ease integration of smartphone business with its handheld videogame players and personal computer operation in the future via full shareholding and control.
Cost-cutting and better mobile development synchronization are also why the deals are in contemplation. Another reason could because of intense competitors in smartphone and tablets market, even Samsung Electronics Co.
This Sony Ericsson talks is not recent news. Instead, it is being held regularly regarding the ownership structure. Also, in the past, one negotiation was failed due to hardships in reaching a mutual agreement over price.
“The joint venture has “more in common” with Sony than Ericsson,” - Bert Nordberg (Sony Ericsson Chief Executive)in an interview last week.
Therefore, it can be seen as Sony is quite aggressive to push itself ahead of other competitors. It desires to close the gap on Apple and others since realizing the fall behind in the rapid mobile- phone development. According to some insiders, this discussion could probably dissolve at any time.
However, the valuation amount is questionable due to complexity, especially as to Swedish company’s mobile technology patent portfolio. Some analysts have pointed out that the value can go up to between €1 billion and €1.25 billion ($1.3 billion to $1.7 billion).
In this moment, the parent companies and Sony Ericsson declined to comment. Since everyone holds smartphone daily, this negotiation will mostly accelerate Sony’s growing strength. Different focus of both partners has made this deal more likely to be happening in nears future.