Sony Ericsson

We've seen this coming for a few weeks now, and today it was announced that after 10 years together and some €1.5 billion in profits, Sony its indeed buying out the Ericsson share in Sony Ericsson

Ericsson confirmed the buyout this morning and will receive a payday of €1.05 billion in return for its half of the partnership. The deal also sees sony receive an IP cross-licensing agreement as well as "five essential patent families."

Why, you ask?

The transaction gives Sony an opportunity to rapidly integrate smartphones into its broad array of network-connected consumer electronics devices – including tablets, televisions and personal computers - for the benefit of consumers and the growth of its business. The transaction also provides Sony with a broad intellectual property (IP) cross-licensing agreement covering all products and services of Sony as well as ownership of five essential patent families relating to wireless handset technology.

Check out the full presser after the break.

Source: Sony Ericsson

Ericsson: Sony to acquire Ericsson's share of Sony Ericsson

October 27, 2011, 08:16 (CEST)

  • Sony Ericsson to become a wholly-owned subsidiary of Sony and integrated into Sony's broad platform of network-connected consumer electronics products
  • The transaction also provides Sony with a broad IP cross-licensing agreement and ownership of five essential patent families
  • Ericsson to receive EUR 1.05 billion cash payment
  • Sony and Ericsson to create wireless connectivity initiative to drive connectivity across multiple platforms

Ericsson (NASDAQ:ERIC) and Sony Corporation ("Sony") today announced that Sony will acquire Ericsson's 50 percent stake in Sony Ericsson Mobile Communications AB ("Sony Ericsson"), making the mobile handset business a wholly-owned subsidiary of Sony.

The transaction gives Sony an opportunity to rapidly integrate smartphones into its broad array of network-connected consumer electronics devices - including tablets, televisions and personal computers - for the benefit of consumers and the growth of its business. The transaction also provides Sony with a broad intellectual property (IP) cross-licensing agreement covering all products and services of Sony as well as ownership of five essential patent families relating to wireless handset technology.

As part of the transaction, Ericsson will receive a cash consideration of EUR 1.05 billion.

During the past ten years the mobile market has shifted focus from simple mobile phones to rich smartphones that include access to internet services and content. The transaction is a logical strategic step that takes into account the nature of this evolution and its impact on the marketplace.

This means that the synergies for Ericsson in having both a world leading technology and telecoms services portfolio and a handset operation are decreasing. Today Ericsson's focus is on the global wireless market as a whole; how wireless connectivity can benefit people, business and society beyond just phones. Consistent with that mission, by setting up a wireless connectivity initiative, Ericsson and Sony 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. 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," said Sir Howard Stringer, Sony's Chairman, Chief Executive Officer and President. Mr Stringer also noted that the acquisition will afford Sony operational efficiencies in engineering, network development and marketing, among other areas. "We can help people enjoy all our content - from movies to music and games - through our many devices, in a way no one else can."

"Ten years ago when we formed the joint venture, thereby combining Sony's consumer products knowledge with Ericsson's telecommunication technology expertise, it was a perfect match to drive the development of feature phones. Today we take an equally logical step as Sony acquires our stake in Sony Ericsson and makes it a part of its broad range of consumer devices. We will now enhance our focus on enabling connectivity for all devices, using our R&D and industry leading patent portfolio to realize a truly connected world" said Hans Vestberg, President and CEO of Ericsson.

When Sony Ericsson started its operations on October 1, 2001, it combined the unprofitable handset operations from Ericsson and Sony. Following a successful turnaround the company has become a market leader in the development of feature phones by integrating Sony's strong consumer products knowledge and Ericsson's telecommunications technology leadership. The WalkmanTM phone and Cyber-shotTM phone are well known examples.

With the successful introduction of the P1 in 2007, Sony Ericsson early on established itself in the smartphone segment. More recently, the company has successfully made the transition from feature phones to Android-based Xperia(TM) smartphones. By the end of the third quarter of 2011, Sony Ericsson held a market share of 11 percent (by value) in the Android phone market, representing 80 percent of the company's third quarter sales. During its ten years in operation Sony Ericsson has generated approximately EUR 1.5 billion of profit and paid dividends totalling approximately EUR 1.9 billion to its parent companies. Prominent models include "XperiaTM arc" and "XperiaTM mini" which received 2011 EISA Awards, while recent notable additions to the lineup include "XperiaTM PLAY" and "XperiaTM arc S".

The transaction, which has been approved by appropriate decision-making bodies of both companies, is expected to close in January 2012, subject to customary closing conditions, including regulatory approvals.

As a result of obtaining full control of Sony Ericsson, Sony will consolidate Sony Ericsson from the closing date of the acquisition. The resulting impact of the acquisition to Sony's consolidated results for the fiscal year ending on March 31, 2012 is currently being evaluated.

Facts about Sony Ericsson
Sales (FY 2010)             EUR 6,294 million
Net income (FY 2010)    EUR 90 million
Number of employees     7,500 (December 2010)
Headquarters                  London
R&D sites                       Beijing, Lund, Silicon Valley and Tokyo
Market share                  11% in Android (FY2011/3Q)
80% of sales are smartphones (Android)

 
There are 14 comments

aapold says:

I don't know if its just me...

but my gut reaction when someone says "sony" is generally negative, and "sony ericcson" is generally positive.

Whhhhhat! Please aapold... Please tell me ONE product from sony erics. that is WOW...? please... And sony tv's computers, cameras, and systems r awesome.... R u kidding me....

aapold says:

Hey, that's just my gut reaction.

The negative sony stuff stems a lot from their rootkit fiasco ( http://en.wikipedia.org/wiki/Sony_BMG_copy_protection_rootkit_scandal ) ... Also never been a playstation fan, especially the ps3...

as for SE, before I started buying smartphones I mostly bought Sony Ericcson feature phones and they made some very good ones back then. I had a Sony Ericcson w600i that I liked a lot until it got stolen, then later got a Sony Ericcson w810i that I think was the best feature phone I ever had. This was only, what, 5 years ago?

http://en.wikipedia.org/wiki/W810i

Yeah they bungled the whole xperia thing pretty badly and I went a different way. But I still fondly recall my w810i. It wasn't perfect, though even there some of the faults (using memorystick instead of microSD, e.g.) I associate more with Sony than SE.

ha ha ha ha ha ha ha did... Did u just say that an Sony Ericcson w810i was a future phone 5 years ago.... Really? My samsung instinct was more futuristic then that... Thing.... Lol... I dont know what u like in a phone but apperantly the only thing u like to do is listen to music and make calls... What u have an xobox? U like paying monthly live crap? U like the.red ring.... Anyways u dont know crap about Sony till u had one

Zemmeh says:

Jesus titty fucking Christ in a hand basket, did you not read anything what he said at all, you mindless fucking fanboy? What he stated is that the way Sony works is something he generally considers negative because of a) Sony's stance on homebrew[an important feature to developers and hackers, especially in a place called the Android community] and b)Sony is more likely to lock down their phones than the whole open nature of Ericcson to begin with. Also, retard, he said "feature" not "future". The fact he made a legitimate argument and all you said was "HURRR YOU LIKE XOBOX? I BET U DO U LIKE PAYING MONTHLY FOR CRAB AND RED RINGS?" One of which was a problem with a previous model, and the other is because Xbox has legitimately better online support than Sony does unless you get PSN+. People like you get on my fucking nerves, man.

In a rage r we... Lol... Calm down u fu#$ shit, u almost popped a vain... Lol

Zemmeh says:

At least most of us can find solace in the fact that the only shit coming out of your mouth is internet memes and not coherent thought(this was not a surprise, though)

Hopefully Sony can get back in the game and offer market-leading products again like they did a decade ago. We have plenty of low end, low def, small screens.

The name Sony has always had a good reputation with me since the I was a kid and I went with my Dad to purchase a new Sony Wega TV back when they first came out. Those were the ish back then. That is why I was hesitant to embrace Sony Ericsson, but now let’s see. Sony makes great quality products I wouldn’t expect any less from them.

lyshote says:

It will be cool though if they add psn connectivity and PS3 remoteplay to their phones, especially the Play.

Sounds kinda like the reasons for which HP bought Palm. Hopefully, it turns out better than that one.

I'm going to miss SE. Some of my earliest phones were SonyEricssons(The T68i and T61c).Quality was not the best with the initial devices but SE came a long way with their Walkman and Cyber-Shot feature phones.I hope Sony keeps the Green Marble logo.

TheMan876 says:

EXCLUSIVE!
Sony has announced that all Sony phones from this point forward will have a proprietary charging cable and a separate and also proprietary data transfer cable. Headphones and storage card will also be proprietary.

eliwood says:

So what does this mean for those who just bought a xperia phone this year? Just got my xpera mini pro last month so I hope they will still support it even after sony buys erricson.