To pace up in the race of smartphones with bigger fishes in this sector, Sony has decided to end its partnership with Ericsson. As the reports say, Sony Corporation has bought its joint mobile venture with Ericson for $1.47 billion. Rumours about the Japan based company taking over its Swedish business partner had been in the air for quite a time. The news has been confirmed by a resourceful Reuter.
This step has been taken to get access and authority to better manipulate Sony’s devices. It will enable Sony to inculcate its array of content into their smartphones and other such devices. The contents include music labels starring Beyoncé and Brittany Spears, movie studio with recent hits being Spiderman and Anonymous as well as PlayStation video games for instance Legends of Norah.
Sony Chairman, Sir Howard Stringer is quite excited about their new advancement. He is of the opinion that it would help them to offer synchronisable devices such as Laptops, televisions, tablets and smartphones more frequently and in a wider range to discover new horizons of online entertainment. The hitherto produced tablets, games and other consumer electronics devices were sold separately from the “Sony Ericsson” branded phones and thus were not synchronized.
Technology analysts observe that Sony is on the move to follow Apple to come up to its consumer’s ‘easy to use’ expectations by producing electronic products with same interphases and operating systems. Smartphones are going to get major importance by Sony now and it will target to make them the main interphase between their customers and internet.
As the Boom experienced by the smartphone sector after the launch of iPhone in 2007, and its unstoppable increasing sales a strong demand for them still persist in spite of the fact that the sales of overall consumer electronic market has slowed down. Smartphones and tablets are new gen televisions. People prefer to watch movies, online videos and stream channels of these portable devices now.
The deal will benefit Sony as with it come all the mobile patents held by Ericsson so far. Due to expected savings in operation, R&D and marketing field the company is expected to cut cost in Sony Ericsson business.
As the tracks suggest, Japanese companies who took over in Europe and America have always struggled. Experts are skeptical about the success of this new venture. It is Sony to prove if they are successful in executing their plans of getting back into the game with Apple and other smart phone vendors.
The hurdle faced by the company right now is that of the challenges of integration. Sony had to take this step as it was lacking the mobile assets which its competitor in the business consumer electronics are boasting and getting profits from. E.g. Samsung who earns half of its profits from its mobile sector investment.
Ericsson has further confirmed that the deal provides Sony with five inevitable patent families for mobile technology along with the intellectual property cross-licensing agreement covering all the products and services.
For Ericsson, the deal has intensified its inclination towards wireless network business of which it is the largest manufacturer. The company is determined to use the money from the deal in strengthening their balance sheets. Entertaining shareholders in not in the plan yet.