The joint venture between Sony and Swedish telecommunications company Ericsson appears to have come to a close. Sony is buying out Ericsson’s share of the mobile phone maker Sony Ericsson for $1.46 billion. Sony Ericsson will become a wholly owned subsidiary of Sony, while Ericsson will take the buyout money and return to focusing directly on their wireless communications business.
For Sony, the move means it will be easier for them to use technology from the Ericsson line to better integrate smartphones with other smart devices, like tablets and televisions. Sony Ericsson has struggled to keep up with the smartphone market, so Sony is hoping the move will streamline operations, and put Sony in a place in the smartphone market where it can be competitive.
In the business world, this didn’t come as a surprise. Ericsson has no desire to put up a fight in the smartphone market, and Sony needs to use the many patents and pieces of intellectual property controlled by Sony Ericsson and integrate them into their full range of devices. Both sides win, so the deal was approved quickly by both Sony and Ericsson. Barring any unforeseen setbacks, the deal should go into effect as of January 2012.
As for the Sony Ericsson brand? Most likely, it will remain in the short-term, but be phased out over time, as all Sony Ericsson products will eventually be marketed under the Sony brand name.