Sony, Ericsson finally part ways on handset business

Sony Ericsson no longer exists as Sony has completed its buy-out of Ericsson from the handset joint venture. The business will now be known as Sony Mobile Communications.

The struggling Japanese consumer electronics giant said in a statement, that its next move will be to “further integrate the mobile phone business as a vital element of its electronics business, with the aim of accelerating convergence between Sony’s lineup of network enabled consumer electronics products, including smartphones, tablets, TVs and PCs.”

Sony and Ericsson first announced the agreement in October 2011, following months of declining sales and Ericsson highlighted then that move was due to “declining synergies in combining network and handset operations.”

Ericsson said that its gain on the transaction will be “approximately SEK7.5 billion (US$1.1 billion),” which will be reported as part of its first quarter 2012 results.

Under the terms of the agreement, Sony and Ericsson have also entered into a broad IP cross-licensing agreement.

Sony Ericsson joined rivals including HTC and Motorola in reporting poor results for the normally lucrative Christmas 2011 sales period, citing intense competition and macroeconomic weakness as reasons for its slip into the red. While the company has succeeded in transferring its focus to smartphones from feature phones, its figures indicate that it is struggling at the premium end of the market.

When Sony Ericsson unveiled a new LTE smartphone headed for AT&T earlier this year, the company was already using Sony-only branding. Attention will now turn to Sony's planned press conference on the eve of this year's Mobile World Congress (Sunday 26 February), its first public event since the official closure of the buyout.