Sony Ericsson to Focus on Smart Phones

Sony Ericsson on October 14^th announced that the mobile manufacturer is going to focus entirely on the thriving smart phone market, to compete with other smart phone rivals like Samsung Electronics and Apple Inc. (NASDAQ:AAPL)

Highlighting the significance of Sony Corp.’s (NYSE:SNE) agreement, amid talks that Sony is planning a buyout in the joint venture, the electronic giant said that it will be focusing completely on the smart phone market in the year 2012, as the company posted a 31 million euro swing back to its profit. The company said due to partial global slowdown it is expecting more marginal pressure.

Bert Nordberg, Chief Executive Officer for Sony said the industry will be hugely affected if the consumer confidence issue continues. Last week, the electronic giant was in talks concerning the Joint venture that it plans to buy out Ericsson’s 50 percent stake at the coming renewal, according to source familiar with the ongoing talks said. However CEO, Bret Nordberg refused to comment on the same.

According to analysts the handset maker can only be successful in keeping keen gadget users away from rivals by incorporating with Japanese electronic giant’s wide range of devices and by getting access to entertainment assets, like the playstation and music gadgets.

Sony Ericsson is currently dependent on its smart phones sales which account about 80 percent for the industry. The company announced that approximately 11 percent in value and 13 percent in volume is its share in the Android based smart phones global market, during this quarter.

Acquiring Sony Ericsson would facilitate Sony with an entry in the competition against rivals like Apple Inc and Samsung Electronics that are presently dominating the smart phone market. The company that had been hampered as a result of disjointed strategy relating online content and mobile gadgets.

Analysts say that a sale for Ericsson would be a wise decision as it would insulate the company’s profit and loss account from the instability Sony Ericsson has brought and will also allow it to concentrate resources for ST-Ericsson a loss-making chip business enterprise. It has been reported that the buyout would cost Sony around $1.5 billion.

This move for Sony Ericsson would be bitter as it plans to focus completely on the smart phone market. The smart phone segment is expected to experience 50 percent against 14 percent overall market growth and all smart phone manufacturers are hungry to have a larger slice of the cake.

Post Written By: Ed Liston Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.