Sony to buy out Ericsson 'to catch up' with rivals (report)

Sony to buy out Ericsson 'to catch up' with rivals (report)

Summary: Sony, trying to break back into the market after the iPhone wiped its smartphones off the map, could ditch its partner Ericsson to do so.

TOPICS: Mobility, Hardware

Sony is in talks to buy out Ericsson's stake in the joint mobile phone venture, in a bid to "catch up with rivals", sources have said.

The sources, speaking to the Wall Street Journal and Reuters said that the half Sony, half Ericsson deal could end the 'Sony Ericsson' brand, allowing Sony to take the reigns and catch up with competitors.

With talks in motion, one source told the Wall Street Journal that the discussions could "break apart at any time", leading some to question how frail the relationship is between the two companies.

Currently, Sony Ericsson is failing to compete against Apple and Samsung, both engaged currently in a bitter patent dispute and strong rivalry, by not producing game-changing devices and online content.

Approaching the tenth anniversary of the partnership, the two companies must decide whether to renew the pact or not. The deal is said to be worth upwards of $1.3 billion, according to Reuters, depending on the outcome of the agreement.

The Wall Street Journal highlights some of the issues with Sony's management of phone development:

"Sony's inability to oversee mobile-phone development directly has become a hindrance as the cellphone has evolved from a simple communications tool to become a multifunction electronics device. By moving phone operations in house, Sony would maximize its technology strengths to develop new innovative handsets more quickly."

Sony Ericsson was once at the forefront of the mobile world, releasing market changing devices combining the power of phone hardware with music software. Once the iPhone was released in 2007, however, Sony Ericsson's marketshare plummeted in favour of Apple's phone.

Back in 2001 when the smartphone market was still emerging, the decision to partner the two mobile device manufacturers seemed smart and logical. Booming at the helm of the Walkman phone, the iPhone set to indirectly seek and destroy the partnership, by challenging what Sony Ericsson had been famed for doing.

Amid Google's proposed acquisition of Motorola Mobility, Sony has an even harder task on its hands -- competing directly with the Android ecosystem.

Topics: Mobility, Hardware

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


Log in or register to join the discussion
  • RE: Sony to buy out Ericsson 'to catch up' with rivals (report)

    This will not help. They have to reform their company from the grassroots in order to catchup with Apple and Samsung. I am not sure how much transformation that their leadership will be willing to go, but definitely they need total cultural change. In order to compete with Apple, it is proven that you need to think like a real consumer, thats what Steve Jobs did, otherwise this may endup like another Beta Max story.
    Ram U
    • RE: Sony to buy out Ericsson 'to catch up' with rivals (report)

      Don't forget Blu-Ray or the memory stic. Sony can't pick a winner.
  • "competing directly with the Android ecosystem"

    Seems unlikely to me; much more likely to use Android to spearhead their revival. I can't imagine they'd expect any other OS to be worth their while - unless there's a rumour that they're talking to HP? (Gives Amazon a break, I suppose!)
    • RE: Sony to buy out Ericsson 'to catch up' with rivals (report)

      @Heenan73: MeeGo? :)
      Although I have my reasons to dislike Sony, so I'm not sure I'd buy such a phone from them. Maybe, just maybe, I would, but probably not.
      (I'm ignoring Tizen until I have any idea what it will be like, I'm not gonna get my hopes up for what could become crappy abandonware.)
      • RE: Sony to buy out Ericsson 'to catch up' with rivals (report)

        The problem is not hardware. The problem is Android. Which is why I can't believe what HP is doing to Web OS. There are just too many Android powered devices on the market with nothing to distinguish them.
  • RE: Sony to buy out Ericsson 'to catch up' with rivals (report)

    My goodness, can't anyone spell? It's "take the reins" as in driving a team of horses, not "take the reigns". We're not talking about Kings here. Wake up! Spellcheck is not omniscient.
  • RE: Sony to buy out Ericsson 'to catch up' with rivals (report)

    The Tablet S and P Series seem to be a good indication that Sony is eager to adopt the Android platform. I'd say it's unlikely they are going to try to compete against it if this goes through.
  • RE: Sony to buy out Ericsson 'to catch up' with rivals (report)

    SonyEric has really lost it. They were actually ahead of the game with the touch screen/Smart phone stampeded, but they did not realize it at that stage. Do anybody remeber the SE P800? I think it can be seen as the first of this craze - 10 years ago, but then they lost the plot.
    • RE: Sony to buy out Ericsson 'to catch up' with rivals (report)

      I agree - although I think it's Ericsson who has lost it. My first 3 mobile phones were Ericsson's and they were some of the best phones I've ever had (And we're talking 11 years ago!). I've just given up on my SE Xperia as it's THE WORST MOBILE PHONE EVER! It fails on almost ALL categories! IMHO - Ericsson would be better off without Sony.

      Sorry - just had to get that off my chest! :-)
      Dan Santhomes
  • tsjrcem 64 psp

    alqdgk,yfoibmgz48, fezqw.