October 07, 2011 at 12:55 PM EDT
Ericsson Buyout Won’t Put Sony Over the Top
Sony's efforts would be better spent away from handsets and instead focused toward its strength of services to make money in the mobile world.

Sony EricssonThe grand unification of Sony (NYSE:SNE) continues. A Friday report at The Wall Street Journal said Sony is trying to buy out Ericsson (NASDAQ:ERIC) from their shared joint venture, mobile phone maker Sony Ericsson. Sony will pay an estimated $1 billion to Ericsson, giving SNE control of both the company and its full array of mobile technology patents, which analysts value somewhere between $1.3 and $1.7 billion.

With Sony’s overall plans for the mobile technology business — which include advanced gaming devices, tablets and more media services than you can shake a stick at — it’s unsurprising that the company wants full control over its smartphone enterprise. Still, it might be too late for Sony to change the shape of that market with its own phones.

At the moment, Sony is preparing to release the PlayStation Vita handheld into the market, as well as the PlayStation Suite — a digital games service supported by Android phones and tablets. It also recently entered the tablet game with the S1 and S2 tablets. With Apple (NASDAQ:AAPL) tightening its grip on the market, Google (NASDAQ:GOOG) repositioning itself as a manufacturing force by acquiring Motorola (NYSE:MMI), and Nokia (NYSE:NOK) preparing to re-enter the market with backing by Microsoft (NASDAQ:MSFT), it’s difficult to imagine that Sony could quickly and effectively take on the smartphone businesses with its own line of handsets.

Sony’s resources have been placed in other developing mobile products, and Sony Ericsson’s existing business has eroded to the point where it needs to be completely restarted. Since Sony also has tied itself closely to the Android platform, it needs to consider how to best leverage that operating system without trying to live on the scraps left by Android phone makers like Samsung (PINK:SSNLF), HTC and Google itself in the future.


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