Should Sony Ericsson buy Motorola’s bleeding Mobile Devices division?

Late last year the world, by that I mean enthusiastic Symbian users, were stunned to find out that Motorola decided to buy a 50% stake in UIQ, the platform that until very recently has powered only Sony Ericsson smartphones. Was this negotiation the beginning of an even stronger relationship to come?

Motorola isn’t known for their loyalty to one particular platform, they’ve even started development on an in house Java and Linux powered operating system. Sony Ericsson on the other hand has their feature phone platform, which is hands down the most robust non-smartphone operating system in the industry due to their stringent efforts to adopt as many J2ME JSRs as possible, as well as the Symbian powered UIQ platform.

Motorola has a horrible reputation in terms of software; anyone who has ever used a RAZR can tell you that. Sony Ericsson meanwhile has a pair of above average operating systems; sadly even at full capacity the Swedish Japanese joint venture can’t make enough handsets to sell.

Sony Ericsson’s 2007 handset shipments broke the 100 million mark for the first time; Motorola’s 2007 sales were dropped to 159 million units compared to 217 million in 2006. Sony Ericsson wants to become a top player, but do they have the logistics to do it? If both companies combined, and if we use 2007 figures, then this merger would create a company that commands 23.3% of the market. Not quite Nokia’s 40%, but certainly eclipsing the current number two player Samsung with 14.3% of the 1.1 billion phones sold last year.

Motorola has a healthy market share in America, but performs quite poorly in Europe and Asia where users demand more capable hardware. Sony Ericsson is only now attempting to break into the American market, but it is difficult to predict how well they’ll do; in Europe and Asia they’re the device of choice for people who don’t already own a Nokia.

Motorola’s corporate structure currently consists of three business units: Mobile Devices, Home and Networks Mobility and Enterprise Mobility Solutions. Together they made 36.6 billion dollars in sales and 2 out of the three units actually increased their numbers; Home and Networks 9% increase year on year and Enterprise Mobility 43% increase year on year. The Mobile Devices unit on the other hand made 33% less in 2007 than it had in 2006 and actually made the company loose 1.2 billion dollars as opposed to making 2.7 billion the year prior.

Sony Ericsson is a separate company, a joint venture between 2 huge players, which focuses purely on mobile devices. They are small and nimble, with one goal: to break into the top 3 mobile phone manufacture space. Motorola would be wise to let their engineers mingle with Sony Ericsson employees in Europe and Asia, they might learn some new tricks and together in terms of both hardware and software talent could become a global powerhouse.

What do you guys think, will there be an alliance formed between the Americans, Swedes and Japanese to try and take on the Finnish or will the barbarians rip each other to shreds as they try to take on each other instead of the number one guy?