Sony

Sony Ericsson Mobile Communications AB is a joint venture established on October 1, 2001 by the Japanese consumer electronics company Sony Corporation and the Swedish telecommunications company Ericsson to manufacture mobile phones. The stated reason for this venture is to combine Sony's consumer electronics expertise with Ericsson's technological knowledge in the communications sector. Both companies have stopped making their own mobile phones.

The company's global management is based in Hammersmith in London, United Kingdom, and it has research & development teams in Lund, Sweden; Tokyo, Japan; Mexico City, Mexico; Beijing, China and Redwood Shores, United States. By 2009, it was the fourth-largest mobile phone manufacturer in the world after Nokia, Samsung and LG. The sales of products largely increased due to the launch of the adaptation of Sony's popular Walkman and Cyber-shot series. In 2010, its market share had dropped to sixth place behind Research In Motion and Apple.

Merger Types

Horizontal, vertical, and conglomerate mergers each raise distinctive competitive concerns.

Horizontal Mergers

Horizontal mergers raise three basic competitive problems. The first is the elimination of competition between the merging firms, which, depending on their size, may be significant. The second is that the unification of the merging firms' operations may create substantial market power and could enable the merged entity to raise prices by reducing output unilaterally. The third problem is that, by increasing concentration in the relevant market, the transaction may strengthen the ability of the market's remaining participants to coordinate their pricing and output decisions. The fear is not that the entities will engage in secret collaboration but that the reduction in the number of industry members will enhance tacit coordination of behavior.

Vertical Mergers

Vertical mergers take two basic forms: forward integration, by which a firm buys a customer, and...