The Sony Ericsson joint venture turned 10 years old a few days ago. However, it may turn out to be the last year together. Sony is closing on a deal to buy Ericsson out of the JV according to the Wall Street Journal.
Sony would justify such a deal, which would cost them between €1 billion and €1.25 billion according to analysts, by highlighting the importance of smartphones with future consumer electronics such as gaming handhelds and tablets. Sony has seen how closely its competitors such as Apple and Samsung have coupled their smartphone and tablet devices and we imagine they would want to have more direct control over their smartphone strategy.
When Sony CEO, Sir Howard Stringer, was recently asked whether the joint venture makes sense, he replied “we talk a lot about this and we continue to talk.” The WSJ report says that Sony would like to move its operations in house to develop new innovative handsets more quickly.
Discussions over the SE structure has taken place regularly over the last few years. The key to understanding the value of the Ericsson business is by quantifying the value of mobile patents it holds. This could be a good move for Ericsson, where handsets are less important compared to its engineering focus. However, ultimately any deal is likely to come down to price.
Via WSJ.
