Sony to Buy Out Ericsson in Cellphone Joint Venture
Well, I’ll say this — Kazuo Hirai knows how to play poker.
He flatly refused to tip his hand at last week’s AsiaD conference. But on Thursday, Sony announced that it is indeed buying out Ericsson in the two companies’ Sony Ericsson joint venture.
Under the terms of the deal, Sony will pay Ericsson 1.05 billion euros; will enter a broad patent cross-licensing deal, giving all of Sony’s products license to Ericsson’s patents; and will take ownership of five patent families directly related to wireless handsets.
Although Hirai refused last week to say whether Sony would buy out the joint venture, he did say it was essential for the company to have control and influence over the unit’s products. And what better way to get control and influence than by taking full ownership?
In their statement announcing the deal, the two companies noted that a lot has changed since the venture was set up 10 years ago, and that, given the shift to smartphones, there is less overlap than there once was with the rest of Ericsson’s business.
Sony also said the move will help it offer more integrated products.
“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,” Sony CEO Howard Stringer said in a statement.
Regardless of who owns it, the handset business has its work cut out for it, having dropped in status to a relatively minor player in the global smartphone business, despite having some nice Android-based hardware.