Sony, the Japanese technology group, plans to take full control of handset manufacturer Sony Ericsson, the Wall Street Journal reports citing people familiar with the matter.
The company is nearing a deal with Ericsson, the WSJ claims. Both companies…
Sony, the Japanese technology group, plans to take full control of handset manufacturer Sony Ericsson, the Wall Street Journal reports citing people familiar with the matter.
The company is nearing a deal with Ericsson, the WSJ claims. Both companies own 50% each in the handset JV, which was founded in 2001.
The move is driven by a desire to create closer links between Sony’s tablets, portable games consoles, and PC businesses and the smartphone business of Sony Ericsson, the people familiar reportedly told the WSJ.
According to the report the JV has lost importance for Ericsson, which is strong in b2b markets.
The article also points out that the CEO of Sony Ericsson, Bert Nordberg, acknowledged recently that the JV and Sony have “more in common” than Ericsson and the JV do.
Fitch, the ratings agency, said that such a move would be positive for Ericsson. “Sony Ericsson continues to struggle as a handset maker and Fitch estimates that its revenue market share fell to 3.7% in Q211 from 7.6% in Q209.”
“A sale of the JV would alleviate fears of additional funding obligations by Ericsson,” Fitch Ratings added.
According to the Sony Ericsson website, the business generated sales of E1.19bn in Q2, a 32% decrease year-on-year and a 4% increase sequentially. The quarter ended in a net loss of E50m, compared to a net income of E12m in the same quarter in the previous year.
