Ericsson is in talks with Microsoft to purchase the firm's IPTV business, which makes software to deliver television across the Internet.
According to Bloomberg, people with knowledge of the matter said that a transaction could be announced as soon as in the coming weeks.
Microsoft's IPTV business provides software used by firms including AT&T, CenturyLink, Deutsche Telekom and Vodafone to provide online streaming. Also known as Microsoft's MediaRoom, the platform provides access to both on-demand and live television content over a two-way IP network, and can provide entertainment services and applications for television sets, PCs and mobile devices.
This could be a strategic shift for the tech giant, which may plan to focus on offering television services through the popular XBox console. In addition, as Ericsson is looking towards mobile technology software rather than hardware (now that it is up against heavyweights including Apple and Samsung), such service platforms could provide a good market niche for the handset maker.
Colin Dixon, chief analyst of nScreenMedia, told the publication:
"MediaRoom has gone from being a centerpiece of Microsoft’s TV strategy to a kind of sideshow."
Recently, Ericsson and STMicro announced that they planned to wind down the joint venture ST-Ericsson after failing to find a buyer for the unprofitable project. Ericsson will be taking on the design, development and sales of LTE products, keeping 1,800 staff and contractors mainly based in Sweden, Germany, India and China. However, the business decision also means that 1,600 employees will be given their marching orders.