Sony early this morning announced that it would be fully acquiring the Sony Ericsson joint venture from partner Ericsson. The transaction will close for slightly over one billion Euro dollars.
The relationship between Sony and Ericsson has been one of the more enduring and straining relationships in wireless. Born in the 2G era, shortly after the launch of the groundbreaking Ericsson T68, the goal was to provide Sony’s brand and media experience, with Ericsson’s talents in the emerging market of mobile devices globally.
However, the relationship began to stagnate as the two companies became more conflicted as to how to steer the joint venture. Sony Ericsson became isolated from the gaming and music ventures at Sony, with PlayStation off limits to the venture for most of its time, only eventually lifting with the rise of the PlayStation Suite and Sony Ericsson Xperia Play.
Music too, suffered, while Apple was able to emerge with iPhone, fusioning iPod and an embedded version of Mac OS X, Sony Ericsson faced political turmoil to compete. Clearances to offer features like a Walkman-branded line of phones came as too little, too late in terms of offerings to compete in the marketplace.
Still, Sony Ericsson did bore some of the most advanced phones for its time. Using the Symbian UIQ platform, Sony Ericsson’s high-end line of P-series smartphones were regarded as some of the most powerful phones for their time. Phones such as the S700i and S710a provided superior photography, at a time when camera phones were regarded as a novelty.
Sony Ericsson suffered many hurdles similar to Nokia in reacting to the rise of iPhone and Android, but for different reasons. Where Nokia had a massive user base and a dated platform that it struggled to overhaul, Sony Ericsson had to face internal turmoil in building a path forward that would satisfy everyone at the table. Nokia failed to carry its user base to a modern platform, and Sony Ericsson shuffled platforms too frequently for users to feel brand loyalty.
After a brief courting of Windows Mobile, which stumbled after a painful transition away from Symbian UIQ for smartphones, the venture settled on Android, which fit in-line with Sony’s ambitions in the tablet and multi-media arena. That technological decision appears to have solidified the acquisition. Ericsson has moved away for the most part from handset development, and its R&D involvement in Sony Ericsson became more equity-driven than strategic.
The acquisition will need to be approved by the EU, where Ericsson is headquartered. The transition will face minimal, if any scrutiny elsewhere. Presuming there are no major objections, Sony expects to have control of Sony Ericsson’s assets around January of 2012.
