Sony Seeking Full Control Over Ericsson

Japanese based Sony Corp. (NYSE:SNE) is looking to gain full control over Sony Ericsson after buying all the shares of the company that it does not already own.

According to a source with the knowledge of the ongoing talks, the Japanese electronics giant is aiming to own a 100 percent stake in Ericsson.

Sony currently owns a 50 percent stake in the Swedish company and is aiming to boost its presence in the Smartphone market. Ericsson has been reporting losses since the past three years and has been unable to compete against smartphones from Apple and Samsung. The company has also reduced its development process for smartphones.

Sony and Ericsson have been under negotiations since the past few months, however the discussions failed because of refusal of the two sides on the settlement terms. Analysts and Sony hope that a complete takeover of Sony would lead to a spur in the development of smartphones and handheld consoles. This can allow Sony to streamline the process of development at Ericsson and at its own facilities.

Sony is aiming to tap the fast growing smartphone market from growth as companies such as Samsung and Apple have accomplished in the smartphone and tablet space. Ericsson has on the other hand refused to step back and instead has asked for end to end control of capabilities.

Bert Nordberg, the CEO of Sony Ericsson last week said that their company will aim to become a full-fledged smartphone company by the second quarter of next year and is aiming for the spot of the biggest Android based smartphone manufacturer in United States. He also said that all smartphone development will fall under the leadership of Sony Ericsson.

Sony might have to pay around $1.5 billion or more for the stake that Ericsson owns, in order to gain full control over the smartphone manufacturer. The transaction will also give Sony Ericsson access to numerous mobile technology related patents that will be instrumental in warding off patent lawsuits.

Sony is also aiming to merge the mobile unit with the company’s video, gamin and music lines. This will provide a huge relief to Sony and will help compete in the highly competitive market of smartphones and tablets. Today competition has moved towards the capability of smartphone manufacturers to provide services and content instead of hardware. None of the companies have commented on the ongoing talks and the future plans.

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.