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Merger suggested for Sony Ericsson & Motorola

Merger suggested for Sony Ericsson & Motorola

American financial research company Sanford C. Bernstein & Co. has floated the idea of merging Motorola and Sony Ericsson in order to allow the two firms to help each other out of the current financial woes they are experiencing as a result of the recession and a popularity slump within both brands.

The conclusion has been reached by Bernstein analysts because the two companies would together gain a significant market share after the merger and could cut costs in order to reduce the current strain on their finances.

The merger is seen as being even more sensible in the light of the fact that both Sony Ericsson and Motorola are producing many new smartphones based on the Google Android mobile operating system. Pooling resources and sharing development costs between the two could result in more popular mobiles in the future if the merger were to go ahead.

Logistically the merger could be problematic, since Sony Ericsson is based in London and Sweden whilst Motorola has its home in Chicago. A further spanner in the works is the fact that Sony Ericsson is already a partnership of sorts, created nine years ago by Japanese electronics giant Sony and Swedish telecoms manufacturer Ericsson.

In support of the merger, Bernstein presented several interesting sets of statistics, with the potential market share making up a significant proportion of its argument. Sony Ericsson and Motorola each share around five per cent of the global market, but this is not consistent across regions and continents, with Sony Ericsson performing better in Europe and India whilst Motorola has strong footholds in China and the USA.

Whether the propositions of the researchers will be taken seriously or not is yet to be seen, but it would certainly shake up the mobile phone market if it were to take place.

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