Sony Ericsson splits after 10 years in Sony cash buyout

Sony Ericsson splits after 10 years in Sony cash buyout

Summary: Sony and Ericsson are not to renew their ten-year pact, allowing the two companies to go their separate ways. Ericsson gets cash, Sony gets investments.

SHARE:
6

Sony and Ericsson are to go their separate ways after ten years of its Sony Ericsson joint venture into the mobile phone market.

Sony is to take full control of the mobile phone venture in a bid to catch up with the two-horse race between Android and iOS-powered phones, with Ericsson taking a consumer-facing backseat for the time being.

Ericsson will receive $1.5 billion in cash for its 50 percent share of the joint venture, which was set up in 2001 to take on Nokia as the then crown prince of mobile manufacturers at the time.

In effect, it has been one of the most drawn out takeovers, in effect, the technology world has seen in recent times.

The breakup, which has been in review over the past few months, was expected, after a source told the Wall Street Journal and Reuters that the ten-year-old pact between the two companies would not be renewed.

It will also give Sony a handful of valuable mobile handset patents by Ericsson, enabling a new range of new products and online content, reports Reuters. Ericsson said that the transaction's output will give Sony the opportunity to integrate smartphone technology into its wider range of products, from televisions, tablets and computers.

The 50-50 partnership has been under scrutiny by Japan-based Sony, after the company saw smartphone demand surge. And, by buying out Ericsson would give Sony a foot in the door with Google, with the search giant already supplying the Android mobile operating system to existing Ericsson phones.

Ericsson will concentrate on sales of wireless communications equipment and services for business and enterprise, leaving the company on the most part without a consumer-focused face.

The deal is expected to close in January 2012, subject to regulatory approval.

Related:

Topics: Hardware, Mobility, Telcos

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.

Talkback

6 comments
Log in or register to join the discussion
  • RE: Sony Ericsson splits after 10 years in Sony cash buyout

    "a bid to catch up with the two-horse race between Android and iOS-powered phones" huh? they are part of that race, being committed to Android. It's not a matter of catch up, more a case of taking some ballast off one of the Android horses. Apple has chosen to run just one horse (itself), while Android now has one more Thoroughbred able to last the distance. Sony may not be the innovative giant it once was, but it has more self awareness than many and, it seems, the ability to do what needs to be done. Go Sony!
    Heenan73
  • RE: Sony Ericsson splits after 10 years in Sony cash buyout

    http://snipurl.com/2dkivf
    HRSYRW
  • RE: Sony Ericsson splits after 10 years in Sony cash buyout

    I like Sony products, so this is cool for me. I guess I'll have to hold on to my Xperia Play (Not that I wouldn't. The gamepad is quite good for emulators.), as it's the last of its kind.
    Aerowind
  • Why This Is Awesome

    Sony - Ericsson = 'The Awakening of a Sleeping Giant?'

    A solely Sony branded phone is something I would seriously consider. This deal has been a long time coming. If they stay with Android, which seems likely since there isn't much of an alternative - Sony ain't no software company for sure - then Sony going it alone creates a true alternative to Apple within the Android ecosystem. This combined with the fact that Nokia WinPhones are only appealing to Apple's disloyal costumers who like hip colors and over-simplified user interfaces could create serious problems for Apple. Unless of course they GET THE F@#$ over themselves and start giving people some options.
    empire.downtown
  • Patents Don't "Enable" Anything

    At best, patents might protect you from lawsuits by competitors, by threatening them with a countersuit.

    At worst, you can be the one to sue first, to try to kill off the competitors.

    Neither of those strategies "enables" anything as far as making useful products goes.
    ldo17
  • Zachary, SE did not 'split'; the company will keep to be single entity as

    before; why you mislead readers?
    DDERSSS