After 10 years, Sony Ericsson may soon be no more. In a joint press conference held in London today, the Sony Corporation and Ericsson announced that the former will be buying over the Swedish company's 50 percent stake for 1.07 billion euros (US$1.47 billion).
The transaction will also provide Sony with ownership of five "essential patent families" in an intellectual property licensing agreement.
Sony will focus on a "four screen strategy"--namely tablet, TV, PC and smartphone--which actually also incorporates its gaming business. CEO Sir Howard Stringer boasts about making its 350 million devices more connected with this push, boldly proclaiming: "It's more than a name change; it's a game change."
However, the Sony Ericsson brand name will be sticking around in the short term, until a task force in Japan headed by current Sony Ericsson CEO Bert Nordberg reaches a decision.
Meanwhile, the Sony-Ericsson relationship continues with a "wireless connectivity initiative…to drive and develop the market's adoption of connectivity across multiple platforms".
Ericsson's CEO Hans Vestberg calls the buyout a "fairly natural step" for his company, as it remains committed to its wireless technologies.
Over the past 10 years, Sony Ericsson has weathered the move from feature phones to smartphones. Currently, Android smartphones account for about 80 percent of Sony Ericsson's handsets. This is set to change, with Sir Stringer announcing the gradual phasing out of feature phones.
When asked if Sony Ericsson might consider buying over webOS at the moment, he said no but added, "Never think never about anything".
Before today's announcement, there had already been murmurs of a buyout. It will help Sony to gain a better foothold on the highly competitive mobile handset market, especially with copyright infringement battles going on now and Google's recent acquisition of Motorola Mobility.
As the deal is expected to be closed by January next year, its immediate impact remains to be seen. As Sony prepares to announce its third quarter earnings on November 2, industry watchers such as Eldar Murtazin have sounded the death knell of the Sony Ericsson brand.
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