Under the terms of the deal, Sony Ericsson will become a wholly-owned subsidiary of Sony and integrated into Sony’s broad platform of network-connected consumer electronics products.The deal also gives Sony ownership of five essential patent families relating to wireless handset technology.
Sony says the deal is a logical strategic step that takes into account the nature of the evolution of mobile from simple phones to sophisticated handsets and tablets. This evolution means that the synergies for Ericsson in having both a technology and telecoms services portfolio and a handset operation are decreasing. Going forward, the two companies will work to drive and develop the market’s adoption of connectivity across multiple platforms.
“This acquisition makes sense for Sony and Ericsson, and it will make the difference for consumers, who want to connect with content wherever they are, whenever they want,” says Sony CEO, Howard Stringer. “With a vibrant smartphone business, and by gaining access to important strategic IP, notably a broad cross-license agreement, our four-screen strategy is in place. We can more rapidly and more widely offer consumers smartphones, laptops, tablets and televisions that seamlessly connect with one another and open up new worlds of online entertainment. This includes Sony’s own acclaimed network services, like the PlayStation Network and Sony Entertainment Network.”
Sony Ericsson is currently focused on the Android market. At the end of Q3, 2011, it held an 11 per cent (by value) share of the Android market, representing 80 per cent of the company’s third quarter sales.