Sony close to returning to phone race

Japanese electronics giant closing deal to buy over Sony-Ericsson joint venture from its Swedish partner, according to reports.
Written by Ellyne Phneah, Contributor

Sony is nearing a deal to buy over Ericsson's share in their mobile phone joint venture, which could cost more than a billion dollars, according to reports.

Reuters reported that the two companies have been in discussion for weeks on Sony Ericsson's future as they must decide in October whether to renew their 10-year deal.

Sony and Ericsson, however, declined to comment on the reported talks. "We have a long-term commitment to our joint ventures," Reuters quoted an Ericsson spokesperson.

Citing people familiar with the matter, the Wall Street Journal said Sony is looking to integrate its smartphone operations with its tablet, handheld game machine and personal computer businesses to save on costs and better synchronize development of mobile devices.

Sony Ericsson was born in 2001 had thrived following the release of its Walkman music phones and Cybershot cameraphones, both of which leveraged Sony's brands. However, it lost out to rivals Nokia and Samsung Electronics at the cheaper end of the market, and was slow to react to Apple's entrance.

The company fell from its position as the fourth-largest mobile phone player just a few years ago, to No. 9 currently.

More recently, Sony Ericsson refocused its business to manufacturing smartphones based Google's Android platform, a strategy that appeared to be in the right direction. The company announced a net profit of US$121 million last year after a loss of US$1.1 billion in 2009, but reported another loss in the second quarter of 2011.

Editorial standards