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He acknowledged the agreement was partly motivated by the tough competition in smart phone market.

“While we do have catching up to do, we have a lot of things to add to this phone,” Stringer said. “The television or whatever that we can make for this phone and other Sony devices is the beginning of something I think is quite magical.”

Stringer said the brand name of the mobile phones would probably change in the future but will remain as Sony Ericsson in the short-term. He added the acquisition will afford Sony operational efficiencies in engineering, network development and marketing.

The transaction is subject to customary closing conditions, including regulatory approvals, but has been approved by appropriate decision-making bodies of both companies.

Ericsson said the shift in the mobile market, from simple mobile phones to smartphones that include access to internet services and content, means the synergies for the company in having both a telecoms services portfolio and a handset operation have decreased.

“Ten years ago when we formed the joint venture, thereby combining Sony’s consumer products knowledge with Ericsson’s telecommunication technology expertise, it was a perfect match to drive the development of feature phones. Today we take an equally logical step as Sony acquires our stake in Sony Ericsson and makes it a part of its broad range of consumer devices,” said Ericsson CEO Hans Vestberg.

Ericsson said it will now focus on the global wireless market as a whole and how wireless connectivity can benefit people, business and society beyond just phones.

Ericsson and Sony will also set up a wireless connectivity initiative aimed at driving and developing the market’s adoption of connectivity across multiple platforms, they said.

The agreement is expected to close in January 2012.

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Malin Rising can be reached at http://twitter.com/malinrising