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Sony buys Sony Ericsson for $1.5-billion

Sony has announced that it will buy out Erricsson’s 50% stake in Sony Erricsson and turn it into a subsidiary by January 2012.

In an official press release, Sony said that Ericsson will receive US$1.5-billion for its stake in Sony Ericsson Mobile Communications. The transaction will most likely be completed by the beginning of 2012. Included in the deal are sets of related patents as well as cross-licensing agreements for various intellectual properties.

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Since 2001, both brands have released their line-up of phones under the Sony Ericsson banner. The new deal will allow Sony to better integrate its new and existing mobile phones to compete more easily with Samsung and Apple’s mobile offerings.

Sony explained the decision, saying:

During the past ten years the mobile market has shifted focus from simple mobile phones to rich smartphones that include access to internet services and content. The transaction is a logical strategic step that takes into account the nature of this evolution and its impact on the marketplace.

“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,” Sony CEO Sir Howard Stringer said in the statement.

Leveraging the various brands under a single banner assisted the business side of the mobile phone division for each company. The globally recognised Sony brand was then applied to hardware such as the Cyber-shot and the Walkman.

What would this mean for the consumer though? With Sony gaining full control of the venture, Google’s Android OS will be added to a new line of mobile phones. This will free up Sony Ericsson and give it time to focus on various wireless services.

According to the press release:

The Xperia Smartphone will serve as a cornerstone to Sony’s unique ‘four screen’ proposition, integrating the Xperia Smartphone portfolio to its existing tablet, TV, videogame and personal computer businesses to deliver a more powerful ‘four screen’ experience enabling a connected PC, TV, Tablet and Smartphone experience for consumers.

The “four screen” integration is Sony’s method of delivering the same content across a full range of popular content devices. Much like with Samsung’s Smart TV, convergence holds the key for many companies tech fortunes. Sony realises how important mobile phones are and with greater than ever demand for smartphones, the Tokyo-based company is looking to create a profitable union for both itself and its customers.

The official announcement will take the form of a webcast.

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