Sony has released a press statement which announces Sony's purchase of Sony Ericsson. Before today, Sony has owned 50% of Sony Ericsson while Ericsson has held the other 50%, making Sony Ericsson a joint operation of Sony and Ericsson. The price of the acquisition is €1.05 billion ($1.475 billion) in cash. Sony has not revealed whether they will keep the Sony Ericsson brand around or just brand products as Sony from now on.

Update: Future products will be branded as Sony.

A brief history lesson: Sony Ericsson was founded in 2001 by Sony and Ericsson (obviously). The aim of Sony Ericsson was to combine Sony's experience of consumer electronics with Ericsson's knowledge of telecommunications. Sony Ericsson is mostly known for their mobile phones, such as the Walkman brand. However, Sony Ericsson has lost a lot of their market share during the era of smartphones. In Q3'08, Sony Ericsson had over 8% market share but in Q2'11, their market share had dropped to below 2%. 

The acquisition makes sense considering that Sony makes a variety of consumer electronics. In August, Sony announced their plans to enter the tablet market. Given that Sony's tablets run Android and so do Sony Ericsson's smartphones, this purchase allows Sony to develop their ecosystem even further. Sony is a major player in TV and PC market, hence they have the possibility to create an Apple-like ecosystem (sans the OSs), which has been proven to be very successful if you look at Apple's quarterly profits. What is certain, though, is that the smartphone market is extremely competitive at the moment, meaning that it won't be easy for Sony to gain market share.

Source: Sony

POST A COMMENT

21 Comments

View All Comments

  • dagamer34 - Thursday, October 27, 2011 - link

    Hopefully some of the designers at Sony Corp. will be working on phones now too. Piano black looks nice on a phone. Reply
  • Exodite - Thursday, October 27, 2011 - link

    Until you touch it, that is.

    Anyway, I've got one word for this...

    Doom!

    Seriously, I wouldn't touch a Sony device with a 10ft pole and I fully expect all the good things SE have started to do with the Xperia brand to vanish overnight.
    Reply
  • Ethaniel - Thursday, October 27, 2011 - link

    ... maybe Sony is just trying to get out of the phone market quickly. 1.47B in cash looks more like a "I'm out" operation, and buying Ericsson's portion was the easiest way to pull the plug. But they could make one hell of a comeback, though. Reply
  • Kristian Vättö - Thursday, October 27, 2011 - link

    I don't think that makes any sense. If Sony wanted to get out of the phone business, they could have just sold their share of SE. Or simply decide to stop is Ericsson was ready to do the same (looks like they did since they sold their share, at least in some degree). Reply
  • Ethaniel - Thursday, October 27, 2011 - link

    That would mean losing rights, tech and patents for hard cash. If Sony buys Ericsson out, Sony can stop making phones and start making money from licenses. I'm sure that someone like HTC or other phone maker would be interested in a "powered by Sony" device. Even with the PSN fiasco, Sony is still one hell of a brand with a lot of presence in audio and video. Or maybe they are just paving the way for another partner. Sony-"something"? Reply
  • shompa - Friday, October 28, 2011 - link

    Just the patents they got is worth far more then 1.47 billions.

    Google bought Motorola mobile for 10 times the money and they don't have a better patent portfolio then Ericsson.

    Its just incompetent people who have been bosses at Ericsson/Sony Ericsson.

    (one small example: to "save" money so could Ericsson not hire anybody. So when the interns quit, we could not hire them for 2K a month. Instead we hired them as consultants for 20K a month. Or the Rolf Skoglund that threw out all Unix workstations and deployed 40K PCs. They wanted us to develop new products in Excel.IT costs went up 10 times and productivity down.)
    Reply
  • WeaselITB - Thursday, October 27, 2011 - link

    Wait, I'm confused.

    Sony purchases 50% of Sony Ericsson for ~$1.5b ... Currently, SE has ~2% market share. They get hardware and design technology exclusivity (rather than sharing), with a little bit of software customization.

    HP purchased 100% of Palm for ~$1.2b ... in 2009, Palm had ~1.5% worldwide market share. They got new hardware and design technology, and a completely independent OS environment.

    Either Sony is way overpaying for this, or HP picked up Palm for a steal. Or a combination of both.

    -Weasel
    Reply
  • Kristian Vättö - Thursday, October 27, 2011 - link

    Remember that there is a lot more than just market share involved. For example patents are a major part of acquisitions. Reply
  • WeaselITB - Thursday, October 27, 2011 - link

    Sure, but Sony already had access to those patents, since they owned 50% of Sony Ericsson. Granted, yes, it was a separate subsidiary, needing to license the patents, etc., but I still can't account for the differences in price.

    And Palm presumably had a pretty decent patent portfolio itself -- http://articles.businessinsider.com/2011-08-18/tec...

    -Weasel
    Reply
  • Exodite - Thursday, October 27, 2011 - link

    Trending is important.

    SE is 2% and trending up, Palm was 1.5% and trending down.

    Having a completely independent OS environment isn't necessarily better either, when it comes to sales price.
    Reply

Log in

Don't have an account? Sign up now