* Sony talking to Ericsson about 50:50 joint venture-WSJ
* Sony and Ericsson decline to comment on reported talks
* Deal would be positive for both companies - analysts
(Adds details in paragraphs 2, 8-11, byline)
By Tarmo Virki, European Technology Correspondent
Oct 6 Sony Corp (6758.T) is nearing a deal to
buy Telefon AB LM Ericsson's (ERICb.ST) stake in their 50:50
smartphone joint venture, The Wall Street Journal reported on
Thursday, citing people familiar with the matter.
Sony and Ericsson have been talking for weeks about the
future of the venture because the companies' 10-year-old pact
is up for renewal this month, two industry sources told
The Wall Street Journal said the talks were ongoing and
could break apart at any time.
Ericsson and Sony declined to comment on the reported
talks. "We have a long-term commitment to our joint ventures,"
said an Ericsson spokesman.
Many analysts say Japan's Sony needs to assert control over
Sony Ericsson if the venture is to recoup market share in the
cut-throat world of smartphones. [ID:nLDE74N0FB]
The joint venture, formed in 2001, thrived after its
breakthrough with Walkman music phones and Cybershot
cameraphones, both of which leveraged Sony's brands.
But it lost out to bigger rivals Nokia NOK1V.HE and
Samsung Electronics (005930.KS) at the cheaper end of the
market, and was late to react to Apple's (AAPL.O) entrance into
the high-end of the market.
It has refocused its business to make smartphones using
Google's (GOOG.O) Android platform, but it has dropped to No. 9
in global cellphone rankings from No. 4 just a few years ago.
It is making some progress and turned a net profit of 90
million euros last year after booking a loss of 836 million in
2009. But it reported another loss for the April-June quarter.
The venture is due to report its September quarter results
on Oct 14.
DIVORCE GOOD FOR BOTH PARTNERS?
"A buyout would make a lot of sense for Ericsson as I
believe their share in the joint venture is worth to them
between zero and minus 1 billion euros," said Bernstein analyst
"Whatever price they agree on, it would be a positive for
Ericsson," he said.
Shares in Sweden's Ericsson gained on the report and closed
6 percent higher at 69.20 crowns on Thursday.
A full takeover of the venture would boost Sony's overall
offering, which includes content, gaming devices, consumer
electronics and even tablet computers. But the company still
lacks its own smartphones.
"The buyout allows Sony to move development in-house and
better integrate other products like gaming into newer phones,"
said Steven Nathasingh from U.S. technology research firm Vaxa
Last month at the IFA trade fair in Berlin, Sony Ericsson's
phones were presented inside the Sony hall, mixed with Sony's
TV sets and new tablets. [ID:nN1E77U0KO]
(Additional reporting by Yinka Adegoke, Anna Ringstrom, Sven
Nordenstam and Liana Balinsky-Baker; Editing by Erica
Billingham and John Wallace)