Sony Ericsson Negotiation Process
The creation of Sony Ericsson Mobile Communications
Formal discussions were held between Ericsson and Sony in late 2000 with serious discussions in early 2001. Before the start of reorganising its operations the Ericsson handset division – DCP Division Consumer Products - employed close to 18,000 people, or almost 20 per cent of total Ericsson employment. Between 6,000 and 7,000 were transferred to Flextronics. An estimated roughly 8,000 were released and another 3,500 were transferred to Sony-Ericsson, EMP 900 Technology Licensing (EBT).
A number of companies had already approached Sony before Ericsson became the main solicitor. They included Motorola, Alcatel and Siemens. Nokia had already, at earlier stage in the 1990s approached Sony when the company wanted to sell its TV operations while at the same time creating a joint venture in telecommunications, an offer that Sony declined.
The Sony-Ericsson discussions initially focused on a soft alliance but Sony firmly required a joint venture. Sony emphasized three considerations as very important – cost, quality and TTM, while semiconductor technology was not going to be included in the deal. Sony identified its strength in user interface and would focus on upper-layer applications, where modules are important in areas such as still cameras, video, MPE4, Bluetooth and GPRS
The Head of Business of Sony initiated discussions with Ericsson in the 2000s to form a joint venture with Ericsson. Sony had a good market for mobile handsets in Japan but was not very successful abroad as the company “came too late” – with only about one per cent of the market. Sony top management suggested that it should be 10 per cent and could reach 20-30 per cent after 6-7 years. Sony started its cellular business in the early 1990s but realized that Samsung came later and has been much more successful – without any experience in radio. Samsung bought almost everything from Qualcomm to enter into the US and subsequently entered
Formal discussions were held between Ericsson and Sony in late 2000 with serious discussions in early 2001. Before the start of reorganising its operations the Ericsson handset division – DCP Division Consumer Products - employed close to 18,000 people, or almost 20 per cent of total Ericsson employment. Between 6,000 and 7,000 were transferred to Flextronics. An estimated roughly 8,000 were released and another 3,500 were transferred to Sony-Ericsson, EMP 900 Technology Licensing (EBT).
A number of companies had already approached Sony before Ericsson became the main solicitor. They included Motorola, Alcatel and Siemens. Nokia had already, at earlier stage in the 1990s approached Sony when the company wanted to sell its TV operations while at the same time creating a joint venture in telecommunications, an offer that Sony declined.
The Sony-Ericsson discussions initially focused on a soft alliance but Sony firmly required a joint venture. Sony emphasized three considerations as very important – cost, quality and TTM, while semiconductor technology was not going to be included in the deal. Sony identified its strength in user interface and would focus on upper-layer applications, where modules are important in areas such as still cameras, video, MPE4, Bluetooth and GPRS
The Head of Business of Sony initiated discussions with Ericsson in the 2000s to form a joint venture with Ericsson. Sony had a good market for mobile handsets in Japan but was not very successful abroad as the company “came too late” – with only about one per cent of the market. Sony top management suggested that it should be 10 per cent and could reach 20-30 per cent after 6-7 years. Sony started its cellular business in the early 1990s but realized that Samsung came later and has been much more successful – without any experience in radio. Samsung bought almost everything from Qualcomm to enter into the US and subsequently entered