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Sony in talks to take over Sony Ericsson

It has been reported widely that Sony Corp. the Japan-based multinational company is in talks with Ericsson to take full control of Sony Ericsson.

Sony and Telefon AB LM Ericsson have been talking for weeks about the future of the 50:50 joint venture because the companies must decide this month whether to renew their 10-year-old pact, according to a report.

Yoshiharu Izumi, an analyst at J.P. Morgan in Tokyo, said the deal could be worth upwards of $1.3 billion, depending on what agreement the two reach about the continuing use of Ericsson’s telecoms patents.

Both Ericsson and Sony have declined to comment.

The Sony-Ericsson venture was formed in 2001. The phone brand become popular with Walkman music phones and Cybershot cameraphones, both of which leveraged Sony’s brands. However tablets, games devices and other consumer electronics are offered under the Sony brand.

But for the past few years it lost out to bigger rivals Nokia and Samsung in the lower end(cheaper phones) market, and was late to react to Apple’s entry into the high-end of the market.

It has refocused its business to make smartphones using Google’s Android platform, but has dropped to No. 9 in global cellphone rankings from No. 4 just a few years ago.

Sony Ericsson made a net profit of 90 million euros last year after booking a loss of 836 million euros in 2009. But it reported another loss for the April-June quarter. The venture is due to report its September quarter results on Oct 14.

[Source]– Reuters

About Kugan

Kugan is the founder of MalaysianWireless. He has been observing the mobile industry since 2003. Connect with him on Twitter: @scamboy