* No comment on reports of Sony taking 100 pct controlBy Simon JohnsonSTOCKHOLM, Oct 14 (Reuters) - Mobile phone maker Sony
Ericsson will focus entirely on the booming smartphone market,
going head to head with rivals like Apple and underlining the
importance of a tie-up with Sony amid reports the electronics
giant is preparing a buyout.The company said it would shift all its production to
smartphones during 2012 as it reported a swing back to profit of
31 million euros, just higher than forecasts.Last week, a source with direct knowledge of the matter told
Reuters Sony was in talks to buy Ericsson’s
50 percent stake in the joint venture. In an
interview with Reuters, Sony Ericsson chief executive Bert
Nordberg declined to comment.Analysts believe the world’s ninth largest handset maker can
only succeed in attracting avid gadget users away from its
rivals by being fully integrated into Sony’s wide portfolio of
devices and getting access to the Japanese electronic giant’s
entertainment assets, like PlayStation and music catalogues.Smartphones currently account for around 80 percent of all
Sony Ericsson’s sales and the company said its share of the
global Android-based smartphone market during the quarter was
approximately 12 percent in volume and 11 percent in value.”Speculation persists that Sony will buy out the JV,” said
Geoff Blaber from CCS Insight.”This is arguably the most desirable end game for a company
that needs full access to Sony content and services.”Controlling Sony Ericsson would help Sony recoup ground in
the battle against Apple Inc and Samsung Electronics
, where it has been hampered by a disjointed strategy
regarding mobile gadgets and online content.For Ericsson, a sale would insulate its profit and loss
account from the volatility Sony Ericsson has brought and allow
it to focus resources on loss-making chip venture ST-Ericsson.A Reuters poll put the price of Ericsson’s 50 percent stake
in Sony Ericsson at around $1.5 billion.SMARTPHONESThe road ahead will be tough for Sony Ericsson as it shifts
fully to smartphones.All handset makers are targeting a bigger share of the
smartphone market and players like Samsung Electronics
and HTC Corp. will be difficult to
dislodge.Sony Ericsson has been losing money for a while, although
its recent focus on smartphones based on Google’s Android
platform pulled the company back into the black.Third quarter pretax profit at the company was 31 million
euros ($42 million), just higher than the mean forecast of 27
million euros in a Reuters poll and a swing back from a loss of
42 million in the previous quarter.”On the sales side it’s actually a pretty strong quarter for
Sony Ericsson,” said Sydbank analyst Morten Imsgaard, who said
that customers like Sony Ericsson’s new product line based
around its Xperia smartphones.”On the earnings side it’s not that strong, and the company
will have to work on that side going forward to lift the
operating margin,” he said.The operating margin was 2 percent, down from 4 percent a
year earlier, indicating that after years of restructuring and
cost cuts, more remains to be done.
$1 = 0.730 Euros)
By Roberta RamptonWASHINGTON, Oct 11 (Reuters) - A Congressional probe into a
$535 million government loan guarantee to Solyndra will focus
on whether the Energy Department broke the law by agreeing to
restructure the failed solar panel maker’s debt earlier this
year at a hearing on Friday, and will feature testimony from
the Treasury Department.Republicans on the House Energy and Commerce committee will
ask Treasury officials, who they have not yet named, about the
terms of the last-ditch deal for Solyndra, which filed for
bankruptcy in August, and was later raided by the FBI.”The subcommittee looks forward to hearing testimony from
the Treasury Department this Friday, especially in light of the
recent discovery of documents that reveal the Treasury believed
DOE violated the law in restructuring the Solyndra loan,” a
committee spokesman said.The Energy Department has stood by its decision in February
to allow Solyndra to restructure its debt when it ran out of
operating cash. Under that plan, some $75 million in private
investment was ranked ahead of the government in the event of
bankruptcy.That private money came from Argonaut Private Equity, a
private fund owned by Obama fundraiser George Kaiser, and
Madrone Capital, affiliated with the Walton family, which
founded Wal-mart Stores Inc .A top U.S. Treasury Department official complained about
that decision in an internal email the committee obtained last
week. Mary Miller, Treasury’s assistant secretary for financial
markets, said in an Aug. 17 email to the White House, that
Treasury Department lawyers did not think the law allowed for
the government loan to be subordinated.Miller said Treasury had wanted the Energy Department to
get approval from Justice Department lawyers.”To our knowledge, that has never happened,’” Miller said
in the email.The loan was provided by Treasury’s Federal Financing Bank
and was guaranteed and monitored by the Energy Department.
Energy Department lawyers determined the restructuring was
legal, a spokesman for the department said on Friday when
Miller’s email was made public.
