Something is going on at Sony. Call it deck chairs moving or trouble in paradise, Sony is definitely going through a period of change. Sony spent $8.4 billion on mergers and acquisitions in 2011. A majority of that amount went into operations to boost their phones and content.
In October they acquire Ericsson’s share in their cellphone joint venture to ensure that it becomes a wholly-owned subsidiary of Sony. So this means that they envision that their cellphone division will become a very important part in the future of Sony.
Sony Corporation (“Sony”) and Telefonaktiebolaget LM Ericsson (“Ericsson”) today announced that Sony will acquire Ericsson’s 50 percent stake in Sony Ericsson Mobile Communications AB (“Sony Ericsson”), making the mobile handset business a wholly-owned subsidiary of Sony.
The transaction gives Sony an opportunity to rapidly integrate smartphones into its broad array of network-connected consumer electronics devices – including tablets, televisions and personal computers – for the benefit of consumers and the growth of its business. The transaction also provides Sony with a broad intellectual property (IP) cross-licensing agreement covering all products and services of Sony as well as ownership of five essential patent families relating to wireless handset technology.
Then on the 26 of December 2011 they quietly announced their intention to sell their share in S-LCD (a joint venture Sony had with Samsung since 2004) to Samsung.
Sony Corporation (“Sony”) and Samsung Electronics Co., Ltd. (“Samsung”) today announced that the two companies have signed agreements to transition the current business relationship with respect to LCD panels.
Under the agreement, Samsung will acquire all of Sony’s shares of S-LCD Corporation (“S-LCD”), the two companies’ LCD panel manufacturing joint venture, making S-LCD a wholly owned subsidiary of Samsung. In consideration for the share transfer, cash consideration of approximately KRW 1.08 trillion* will be paid to Sony by Samsung. Concurrently, the two companies have entered into a new strategic agreement for the supply and purchase of LCD panels with a goal of enhancing the competitiveness of both companies. The agreement also allows Sony and Samsung to continue cooperative engineering efforts focused on LCD panel technology.
These are 2 very big decisions that the Board of Sony have made in a space of 3 months. It leads me to wonder if Sony is in financial trouble or are they trying to become more focused?
The truth is that the consumer electronics industry is getting more competitive by the day. So if your ducks are not in a row, the potential to get behind the rest of the industry is a reality. I wonder will this impact the sales of Sony LCD TV’s,their popular console and the recently launched PlayStation Vita.
