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RumorTT: Sony to finally buy out Ericssons stake in their mobile phone joint venture

RumorTT: Sony to buy out Ericsson's stake out of Sony-Ericsson

By Anthony Garreffa from Oct 7, 2011 @ 21:25 CDT

Rumor has it that Sony is near a deal to buy out Ericsson's stake in their mobile phone joint venture. Sony may pay up to $1.7 billion to gain full control of the London-based entity and venture into the mobile phone market on its own as it plays catch-up with Apple, HTC, Samsung and others. Sony's management sees the consumer-focused smartphone business as an essential part of a strategy to extend their online portfolio of music, videos and games.


Whereas, Ericsson has more of a business-to-business focus and no longer sees selling handsets as key to entice mobile phone operators to buy its telecommunications equipment. Sony and Ericsson combined their cellphone operations in 2001 to a 50/50 joint venture. Sony Ericsson did strike gold for a while, with the Walkman-branded phones, but the venture was slow to catch the smartphone boom.

In both 2008 and 2009, Sony Ericsson posted two consecutive years of net losses, downsized and returned to profitability in fiscal 2010 and the first quarter of fiscal 2011. They then slipped back into the red the next quarter.


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