October 28 2011: Ericsson and Sony Corporation have parted in the mobile handset business: they have announced that Sony will acquire Ericsson's 50 percent stake in Sony Ericsson Mobile Communications AB , making the mobile handset business a wholly-owned subsidiary of Sony. As part of the transaction, Ericsson will receive a cash consideration of EUR 1.05 billion. The parent companies say it’s not a divorce. Rather, the phone-making part of the business will go back into Sony with its consumer electronics expertise, and Ericsson will continue to enable wireless connectivity in all devices, no matter who the manufacturer is.
Sir Howard Stringer, the Chairman, CEO and President of Sony, reviewed the joint venture’s accomplishments in 10 years, saying that Sony Ericsson has developed great design, a global brand and good consumer relationships. He said there are more smartphones than people in the United States, which exemplifies the change in the marketplace and a good reason for a change in Sony Ericsson’s structure. He said the two companies will work closely together on the new initiative. , Sir Howard said: "Ericsson has been a wonderful partner. We will continue to have a relationship because … Hans Vestberg ( Ericsson CEO) and I are the same height!"
The transaction also provides Sony with a broad 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. During the past ten years the mobile market has shifted focus from simple mobile phones to rich smartphones that include access to internet services and content.
The transaction is a logical strategic step that takes into account the nature of this evolution and its impact on the marketplace. This means that the synergies for Ericsson in having both a world leading technology and telecoms services portfolio and a handset operation are decreasing. Today Ericsson's focus is on the global wireless market as a whole; how wireless connectivity can benefit people, business and society beyond just phones. Ericsson and Sony will work to drive and develop the market's adoption of connectivity across multiple platforms. The two companies have set up the Wireless Connectivity Initiative, which the CEOs from both companies described as "a way to enable the ecosystem of wireless technology in all consumer electronics."
When Sony Ericsson started its operations on October 1, 2001, it combined the unprofitable handset operations from Ericsson and Sony. Following a successful turnaround the company has become a market leader in the development of feature phones by integrating Sony's strong consumer products knowledge and Ericsson's telecommunications technology leadership. The Walkman phone and Cyber-shot phone are well known examples.
More recently, the company has successfully made the transition from feature phones to Android-based Xperia smartphones.
In India, Sony-Ericsson has just launched a slate of new handsets encashing Sony’s Bravia display technology www.indiatechonline.com/india-launch-of--sony-ericsson-xperia-handsets-330.php and earlier in the year it leveraged the Walkman music brand www.indiatechonline.com/sonyericsson-walkman-459.php . In June P Balaji had taken over as head of Sony-Ericsson in India, having moved after many years with Ericsson. http://www.indiatechonline.com/p.-balaji,-managing-director-(india)-sonyn-ericsson-43.php