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Report: Sony To Take Over Sony Ericsson

10/06/2011 02:13:31 PM Eastern
New York - Cellphone maker Sony Ericsson, jointly owned by Sony and Ericsson, declined to comment on a Wall Street Journal report that Sony is nearing a deal to purchase Ericsson's stake of the company.

Sony and Ericsson combined their cellphone operations in 2001 into a 50/50 joint venture. In 2008 and 2009, the company posted two consecutive years of net losses, downsized, and returned to profitability in each quarter of fiscal 2010 and in the first quarter of fiscal 2011. The company then slipped back into the red in its 2011 fiscal second quarter.

 Sony Ericsson will announce third-quarter 2011 result on Oct. 14, when it might respond to questions from analysts about Sony's possible purchase of the other half of Sony Ericsson.

Analyst Jeff Kagan said he believes a purchase "makes a lot of sense." If a company "is being pulled in this direction and that by different companies with different strategies, it will never break in to the big time," he said. "Smartphones are important going forward. However, there needs to be a singular focus."

 Sony and Ericsson, he contended, have been "struggling to try and manage the smart phone opportunity over the last several years. It has been a disaster."

Sony Ericsson is the world's sixth-largest wireless phone maker, he said.
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