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Sony pays €1.05bn to buy out Ericsson

Mobile handset business to become completely owned subsidiary

Sony Ericsson has announced that Sony itself will be buying out the Ericsson share of the mobile handset company for a €1.05 billion ($1.45bn) cash payment, although further incentives may also be involved.

"This acquisition makes sense for Sony and Ericsson, and it will make the difference for consumers, who want to connect with content wherever they are, whenever they want," said Sony chairman, president and CEO Howard Stringer.

"With a vibrant smartphone business and by gaining access to important strategic IP, notably a broad cross-license agreement, our four-screen strategy is in place. We can more rapidly and more widely offer consumers smartphones, laptops, tablets and televisions that seamlessly connect with one another and open up new worlds of online entertainment. This includes Sony's own acclaimed network services, like the PlayStation Network and Sony Entertainment Network."

The move puts Sony in the position of being able to integrate the company's mobile communication technology directly into other projects more easily, something which could be seen as a potential response to the accusations of 'over-specialising' the forthcoming PlayStation Vita.

Some industry figures and analysts have painted a bleak picture for that device, claiming that its unit price is too high for a dedicated gaming handheld in the face of opposition from smartphones.

A 3G model of the Vita is planned, but no telephonic capabilities have yet been announced for it, instead using the mobile signal for online play and downloads.

Ericsson itself will remain in the business of connectivity technology, said president and CEO Hans Vestburg.

"Ten years ago when we formed the joint venture, thereby combining Sony's consumer products knowledge with Ericsson's telecommunication technology expertise, it was a perfect match to drive the development of feature phones.

"Today we take an equally logical step as Sony acquires our stake in Sony Ericsson and makes it a part of its broad range of consumer devices. We will now enhance our focus on enabling connectivity for all devices, using our R&D and industry leading patent portfolio to realize a truly connected world."

The deal also puts Sony in control of a number of important and potentially lucrative mobile technology patent families - an area which has seen enormous interest from tech companies, with deals such as Google's acquisition of Motorola and the continuing legal battles between Apple and Samsung.

The most significant product from Sony Ericsson for gaming had been the recent Xperia Play, a long rumoured 'PlayStation' branded phone with a physical D-Pad and buttons designed to play games, including a back catalogue of PlayStation titles.

That handset stuttered somewhat at launch and recently went through a re-launching process, securing a timed mobile exclusive of Minecraft for the device.

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Dan Pearson