A customer picks up a Sony Ericsson smartphone at an electronics shop in Tokyo Friday. Sony Corp is in talks to buy out Ericsson's stake in their mobile phone joint venture, a source said, in a bid to catch up with rivals. [Photo: Agencies]
Sony Corp is in talks to buy out Ericsson's stake in their mobile phone joint venture, a source said, in a bid to catch up with rivals.
The move could help Sony recoup ground in the battle against Apple Inc and Samsung Electronics, where it has been hampered by its disparate offerings of mobile gadgets and online content.
Tablets, games devices and other consumer electronics are offered under the Sony brand, while smartphones come under Sony Ericsson.
Sony and Telefon AB LM Ericsson have been talking for weeks about the future of the 50:50 joint venture because the companies must decide this month whether to renew their 10-year-old pact, two industry sources said.
A source with direct knowledge of the matter told Reuters Friday Sony was discussing a buyout. The source did not want to be identified because the talks were not public.
Yoshiharu Izumi, an analyst at JP Morgan in Tokyo, said the deal could be worth upwards of US$1.3 billion, depending on what agreement the two reach about the continuing use of Ericsson's telecoms patents.
"Up to now Sony's products and network services have all been separate. Unifying them would be positive," Izumi said.
"If they can leverage their games and other network services I think they can lift their share," he added.
Ericsson and Sony declined to comment on the talks. "We have a long-term commitment to our joint ventures," said an Ericsson spokesman.