Sony to buy out rest of Sony Ericsson for $1.475 billion

Sony Ericsson logoSony Ericsson announced on Thursday that Sony will buy out the remainder of Sony Ericsson for $1.475 billion. Making Sony Ericsson a wholly owned subsidiary of Sony will allow for better product integration across Sony’s slate of offerings, and will also bolster its patent holdings with ownership of “five essential patent families,” says Ericsson.

Sony Ericsson was formed in 2001 when Sony and Ericsson merged their "unprofitable" handset businesses so that they could make feature phones that were more attractive to consumers. The companies cite the Walkman phone and Cyber-shot phone as “well known examples” of their partnership.

While Sony Ericsson had some success in that area, it has adapted less well to the smartphone market. The company's market share in smartphones rose from 3 to 5 percent since 2010, but the two companies have remained tight-lipped on the performance of its Xperia smartphone line (Sony Ericsson would only say the Android-based Xperia Play was “meeting expectations”).

With Sony Ericsson as a wholly owned subsidiary, Sony will be able to offer consumers “smartphones, laptops, tablets, and televisions that seamlessly connect with one another” to access content, according to a statement issued by Sony CEO Sir Howard Stringer. PlayStation Network and Sony Entertainment Network will figure here, Stringer says. Stringer also notes that the buyout will give Sony ownership of “strategic” IP relating to wireless handset technology.

The decision-making bodies of both companies have approved the transaction, which is set to close in January 2012.

Source: Ars Technica

Tags: Sony, Sony Ericsson

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