Sony Buys Out Ericsson To Boost Consumer Appeal

Sony plans to buy-out Ericsson’s 50 percent stake in the two companies’ mobile-device concerns for $1.5 billion (£932m), according to reports.

“It’s the beginning of something which I think is quite magical,” Sony chairman Sir Howard Stringer said at a London news conference, according to Reuters. “We can more rapidly and more widely offer consumers smartphones, laptops, tablets and televisions that seamlessly connect with one another and open up new worlds of online entertainment.”

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Under the terms of the new agreement, Sony will apparently take control of select Ericsson patents related to handsets. Ericsson will then shift from the mobility business to other areas, leaving Sony to compete on its own with the likes of Samsung and HTC. In that battle, Sony has one particular advantage: Thanks to its entertainment arm, the company can leverage whole libraries of audio and video content to boost the appeal of its smartphones.

In essence, that would make Sony more of an entity along the lines of Apple, which takes great pains to control every aspect of its mobility experience, from entertainment offerings to hardware.

At this year’s Ceatec conference in Tokyo, Sony demonstrated a variety of handhelds targeting the consumer market. In addition to a revival of the iconic Walkman brand as a line of Android-powered multimedia players, the company offered up two new Android tablets – the dual-screen Tablet P and the more traditional, 9.4-inch Tablet S – that could appear soon on the American market. Sony Ericsson has its line of Xperia smartphones, powered by Android, but Sony might spin its mobility strategy into a line of wholly new devices under a different brand name.

According to Reuters, Sony Ericsson occupied around two percent of the global cell phone market in 2010. Recent devices included the Xperia Active Android smartphone, a compact and water-resistant phone designed for fitness, allowing users to monitor their heart rate on a screen while working out.

Despite its wide portfolio of devices and enviable brand recognition, Sony has wrestled very publicly with some technology issues over the past year, most of them related to a data breach that compromised tens of millions of PlayStation Network accounts. The company is fighting tooth-and-nail with Microsoft for gamers’ hearts and wallets.