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Sony is reportedly close to buying Ericsson out of their long-running mobile phone joint-venture, Sony Ericsson.
The US-based Wall Street Journal cited insiders on the deal, saying talks were still ongoing and could break up at any time, adding that negotiations between the two companies to unwind the venture have broken down in the past as the two sides struggled to reach an agreement over price, the people familiar with the matter added.
Analysts estimate that Ericsson's stake could be valued between US$1.3 billion to $1.7 billion.
The paper noted that Sony aimed to integrate the smartphone operation with its businesses in tablets, hand-held game machines, and personal computers to save on costs and better synchronize development of mobile devices.
It said the key advantage as seen from Sony's perspective is that it can tie the smartphone portfolio with its other consumer devices and critically tap into its content division in much the same way that Apple was able to synchronize content with hardware.
Sony-Ericsson was established in 2001 by Sony and Ericsson to make mobile phones after a fire in March 2000 at a Philips factory in Albuquerque, the sole supplier of semiconductors to Ericsson nearly crippled the company.
The stated reason for this venture was to combine Sony's consumer electronics expertise with Ericsson's technological leadership in the communications sector.
However, the joint-venture has never been able to fully capitalize on Sony assets, such as the PlayStation brand, although it had some success with the Walkman products.
The two joint owners are known to have had an often fraught relationship with Sony often being reported to want to walk away from the venture.
Sony-Ericsson phones are not very popular in Africa compared with other handsets, but Ericsson recently established a Regional Support Centre in Ghana to provide cutting-edge network services to 100 corporates clients across Africa, mainly telecom operators and institutions in the ICT industry.
Ericsson’s Country Manager for Ghana, Alan Triggs admitted the company’s core business was network services and not handset dealership, saying “we are world leaders in telecommunications network services.”
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