Sony Close to Buy Out Ericsson's Stake in Sony Ericsson Joint Venture

Created in October 2001, Sony Ericsson joint venture may soon become a thing of the past, as rumors in the market claim that Sony is determined to buy out Ericsson's stake.

The reason behind Sony's decision may lie in the fact that the Japanese giant wants to integrate the smartphone business with its tablet and console gaming operations in order to save costs and have a better development strategy.

According to Wall Street Journal, citing sources close to the matter, Sony is very close to wrest full control over the joint venture.

In light of the new financial results reported by Sony Ericsson, which were close to a net loss of almost €50 million in the second quarter of 2011, Ericsson may be tempted to deliver its 50% stake, assuming Sony is willing to pay the right amount.

In this regard, analysts in the market estimate that Ericsson's stake in the joint venture, including its entire patents portfolio could be worth between $1.3 and $1.7 billion.

It looks like Sony was planning to buy out Ericsson's share long ago, but for unknown reasons decided against it until now.

Rumors about the Japanese company's plan to take complete control over the joint venture have come and gone over the years, but this time the deal is nearly done, sources familiar with the matter claim.

The deal might also be a direct result of the low impact the joint venture's products had on the smartphone market.

Products like Xperia Play that was rumored for years as the “Playstation Phone” only made it to the market recently and did not have the expected impact on the market.

It may also have something to do with the fact that Sony has just entered the tablet market with two gaming-focused devices Sony S and Sony P.