• Sweden edition
 
Ericsson and Sony go separate ways

Ericsson and Sony go separate ways

Published: 27 Oct 2011 08:49 GMT+02:00
Updated: 27 Oct 2011 21:06 GMT+02:00

"Sony will acquire Ericsson's 50 percent stake in Sony Ericsson... making the mobile handset business a wholly-owned subsidiary of Sony," Ericsson said in a statement.

The Japanese-Swedish group was created in 2001, combining the then unprofitable handset operations of Ericsson and Sony to today become the sixth-biggest player in the global market.

In its statement, Ericsson pointed out that the mobile phone market has changed dramatically over the past decade, with focus shifting heavily to smartphones.

Ericsson CEO Hans Vestberg called the 10-year-old venture a "perfect match" at the time, the move to separate was nevertheless a "logical step".

"We will now enhance our focus on enabling connectivity for all devices," Vestberg said in a statement, pointing out that the Swedish company aimed to concentrate on the wireless market as a whole, "using our R&D (research and development) and industry leading patent portfolio to realise a truly connected world."

Sony meanwhile will with the deal secure "a broad intellectual property (IP) cross-licensing agreement covering all products and services of Sony as well as ownership of five essential patent families relating to wireless handset technology."

The two companies said they would continue working together, announcing they had set up a "wireless connectivity iniative ... to drive and develop the market's adoption of connectivity across multiple platforms."

Ericsson said the transaction had been approved by both companies but was still pending regulatory approvals. It is expected to close in January, 2012.

"The transaction will result in a positive capital gain for Ericsson which will be defined after closing of the transaction," the company said.

"This day is an important milestone for Sony Ericsson and smarthphone users across the world," Sony Ericsson CEO Berg Nordberg said in a statement.

"As a part of Sony, we can take advantage of Sony's technology, content, and services to develop and improve our portfolio."

While hailing the past decade's partnership with Ericsson, Sony president and chief executive Howard Stringer pointed out that the market had drastically shifted since 2001 from focusing on loss-making simple mobile phones to highly profitable smartphones.

The separation from the Swedish company was therefore a logical and strategic step that would enable Sony to more efficiently deliver devices that can connect to each other and open up new entertainment possibilities, he told a news conference in London.

By taking full control, Sony can integrate its smartphone operation with its tablet, hand-held game console and personal computer businesses to save on costs and better synchronise development of mobile devices.

The move comes as Sony's competitors such as Apple of the United States and Samsung Electronics of South Korea forge ahead with closely coupled strategies for smartphones and tablet computers.

Analysts say the move would help accelerate Sony's efforts to push its vast library of content through its game consoles, smartphones and tablet computers to face up to competition from Apple's iTunes and App store.

"The transaction gives Sony an opportunity to rapidly integrate smartphones into its broad array of network-connected consumer electronics devices -- including tablets, televisions and personal computers," Stringer said in a statement.

Last year, Sony Ericsson posted a net profit of €90 million, compared to a net loss in 2009 of 836 million.

By the third quarter this year, touch-screen smartphones accounted for 80 percent of the joint venture's sales.

Thursday's announcement followed weeks of rumours Sony was looking to buy out Ericsson from the joint venture and analysts said they were not surprised, with the terms in line with expectations.

Canalys analyst Pete Cunningham said the deal in fact was "the only feasible option."

"If nothing had happened, Sony Ericsson would most probably have died in the next 18 months due to problems it has had to differentiate its handset products," he told Dow Jones Newswires.

"With the acquisition, Sony now has all components to compete directly with Apple and Samsung," he added.

Investors responded positively to the news, with Ericsson's share price closing up more than 4.0 percent, in line with the overall Stockholm stock exchange.

TT/AFP/The Local (news@thelocal.se)

Don't miss...X
Left Right

Your comments about this article

09:54 October 27, 2011 by faizans80
Good for both !!

Ericsson want to lead but they cant compete in all areas. So better to focus on ther "Network connectivity thingy"
10:04 October 27, 2011 by Exiled
The best move for Ericsson, but potentially a sad day for those employed by Sony Ericsson in Lund.
08:20 October 28, 2011 by mikewhite
Yes, not a single mention of the fate of the Swedish S-E sites.
10:13 October 28, 2011 by Zeffanyx
Well, it all started with Ericsson, and now end up with Sony. There had been several posts about Lund's office cutting the staff amount and it was the move to what we see now: Sweden no longer produces high-tech phones, nor will it do any significant R&D soon.

I really loved Ericsson phones, though :)
11:01 October 28, 2011 by mikewhite
With Saab and Volvo, it was one of Sweden's trademark industrial icons.

I wonder if their handsets will be as popular in the Nordic countries when the link with Ericsson goes.
00:34 October 29, 2011 by salalah
It always was a strange marriage....
Today's headlines
Boy receives cancer vaccine by mistake
Photo: Hasse Holmberg/TT

Boy receives cancer vaccine by mistake

A boy scheduled to be vaccinated against mumps, measles, and rubella instead received a vaccine against cervical cancer. His family has now reported the blunder for inspection. READ  

Sweden grants additional funds to jobs agency
Photo: Bertil Enevåg Ericson/TT

Sweden grants additional funds to jobs agency

The Swedish government has announced that it will increase funding to the jobs agency (Arbetsförmedlingen) in 2015, primarily to cover personnel costs but also to prevent long-term unemployment. READ  

Police 'powerless' against street racers
Police on E4 highway. Photo: Johan Nilsson/TT

Police 'powerless' against street racers

Stockholm police said they were powerless to react when streetracers took over at "insane speeds" on a large highway on Friday night. READ  

Saab carmaker wins receivership
Photo: Björn Larsson Rosvall/TT

Saab carmaker wins receivership

After initial rejection, a Chinese-owned company set up to take over Saab's assets after the troubled Swedish carmaker's bankruptcy said on Friday it had succeeded in being placed in receivership. READ  

Woman suffers cardiac arrest while giving birth
Photo: Tomas Oneborg/TT

Woman suffers cardiac arrest while giving birth

A 30-year-old woman went into cardiac arrest while giving birth at a Stockholm clinic - without hospital staff noticing that anything was wrong. She remains in a critical condition on Friday. READ  

Champions League
History repeats for Malmö fifty years later
Striker Magnus Eriksson during Malmö's 3-0 win over Salzburg in a Champions League qualifier. Photo: Björn Lindgren/TT

History repeats for Malmö fifty years later

Malmö's entry into the Champions League serves as a reminder of times gone by in European football. With Spain's champions bound for Sweden things just couldn't be better, writes contributor Lee Roden. READ  

Elections 2014
Löfven promises jobs to 50,000 young Swedes
Social Democrat leader Stefan Löfven. Photo: Fredrik Sandberg/TT

Löfven promises jobs to 50,000 young Swedes

Social Democrat party leader Stefan Löfven announced on Friday his "most important election promise", a 90-day job guarantee programme for young Swedes. READ  

 Sweden to buy fighter jets despite Swiss pullout
The Jas Gripen fighter aircraft. File photo: Wikimedia

Sweden to buy fighter jets despite Swiss pullout

Sweden said Friday it would go ahead with the purchase of a new generation of Saab Gripen fighter jets, despite Switzerland pulling out of a major co-financing deal. READ  

Three hurt after northern knife attack

Three hurt after northern knife attack

Three people are in hospital after they were stabbed during what police suspect was a gang-related attack in Umeå. READ  

Stockholm 'thief' turns out to be trainee ninja

Stockholm 'thief' turns out to be trainee ninja

Stockholm police rushed to the scene when a worried Swede reported that their neighbours were the victim of a break-in - but when officers arrived, they found nothing but a ninja in the middle of practice. READ  

RECEIVE OUR NEWSLETTER AND ALERTS
Gallery
People-watching August 27
Gallery
Top ten false friends in Swedish
National
Roma advocate scoops Wallenberg prize
Society
Meet the man who made a Swedish store recall its high heels for kids
Business & Money
'How I came to run my own business in Sweden'
Blog updates

25 August

Hit och dit, här och där (The Swedish Teacher) »

" Hej igen! A common challenge for Swedish language students are the location adverbs hit/här, dit/där, hem/hemma etc. Some of the location adverbs come in two versions. We should use one type of location adverb when we use a verb describes where we are, and we should use the other type of location adverb when we the verb..." READ »

 

25 August

The Dollar Store (Blogweiser) »

"A dollar store in Sweden. Blog post: http://t.co/tNuuvcP1q0 #USD #greenbacks #sweden #sverige pic.twitter.com/RHFAYf7U1k — Joel Sherwood (@joeldsherwood) August 23, 2014 There’s a chain here in Sweden called The DollarStore. This name always stood out to me in a country where they don’t use dollars. I went there for the first time this weekend. They actually accepted greenbacks..." READ »

 
 
 
Politics
Expert explains why Sweden's election oozes uncertainty
National
City plays Schindler's List theme at Nazi rally
Society
For Stockholm Fashion Week, here's the A-Z of Swedish fashion
National
'Amnesiac' man avoids deportation for ten years
Gallery
Princess Estelle through the years
Business & Money
Swedish city all set for six-hour workday trial
Business & Money
Five golden rules for the Swedish job hunt
Sponsored Article
Graduates: Insure your income in Sweden with AEA
Gallery
People-watching August 22-24
National
Armed royal guards caught (very) drunk on the job
National
Sweden orders textbook on Roma discrimination
Gallery
Violent anti-Nazi demonstrations in Malmö
Society
A closer look at Sweden's five official minority languages
Gallery
See the destruction from the southern Sweden floods
Politics
'Sweden Democrats hold the key to elections'
Society
Swedes celebrate first day of smelly fish season
Politics
Sweden elections: How do they work?
Finest.se
Gallery
People-watching August 20th
Society
Did you know the Bronx in NYC was named after a Swede?
Sponsored Article
Find out what gives this Swedish school executive appeal
Sponsored Article
Introducing...Your finances in Stockholm
Sponsored Article
Introducing...Housing in Stockholm
Latest news from The Local in Austria

More news from Austria at thelocal.at

Latest news from The Local in Switzerland

More news from Switzerland at thelocal.ch

Latest news from The Local in Germany

More news from Germany at thelocal.de

Latest news from The Local in Denmark

More news from Denmark at thelocal.dk

Latest news from The Local in Spain

More news from Spain at thelocal.es

Latest news from The Local in France

More news from France at thelocal.fr

Latest news from The Local in Italy

More news from Italy at thelocal.it

Latest news from The Local in Norway

More news from Norway at thelocal.no

775
jobs available
Swedish Down Town Consulting & Productions
Swedish Down Town Consulting & Productions is an innovative business company which provides valuable assistance with the Swedish Authorities, Swedish language practice and general communications. Call 073-100 47 81 or visit:
www.swedishdowntown.com
PSD Media
PSD Media is marketing company that offers innovative solutions for online retailers. We provide modern solutions that help increase traffic and raise conversion. Visit our site at:
http://psdmedia.se