There have been plenty of rumors surrounding the purchase of Sony Ericsson, the mobile unit of Sony, but today it was made official. An announcement came in today that Sony did agree to purchase the mobile unit, Sony Ericsson for almost $1.5 billion and this allows Sony control of the 50 plus percent stake that Ericsson had in the partnership. Many in the mobile industry were happy about the rumors when they first surfaced about one month ago and the deal would be a very quick way for Sony to get back into the game against Apple’s iPhone and any Android device.
Howard Stringer, Sony CEO, made a statement about the purchase saying, “This acquisition makes sense for Sony and Ericsson, and it will make the difference for consumers, who want to connect with content wherever they are, whenever they want. With a vibrant smartphone business and by gaining access to important strategic IP, notably a broad cross-license agreement, our four-screen strategy is in place. 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. This includes Sony’s own acclaimed network services, like the PlayStation Network and Sony Entertainment Network.”
Sony is not exactly a big part of the mobile industry, but purchasing Ericsson the company looks to leverage the music and video parts in hopes of closing any gaps with Apple. Because Sony deals with both music and video, the hope is that now they can better integrate the features into smartphone handsets and lure new customers that might be looking to upgrade when a two-year contract is up for renewal. Sony is taking a page from Apple’s playbook in hopes of providing a smartphone user with more than just a phone and by connecting more than one device through a similar operating system that makes the experience seem flawless.
Sony is not going to have it any easier than they have had it before the purchase. The road ahead will be a struggle but Sony did get certain handset patents from Ericsson that might be useful in cutting overall costs associated with manufacturing handsets. Stringer pointed out the cost savings in R&D, operations and marketing just to name a few places the company will gain in the cost department.
