Microsoft Corporation (NASDAQ:MSFT) is apparently in talks with Ericsson (NASDAQ:ERIC) (STO:ERIC-A) (STO:ERIC-B) to sell its TV streaming software. The news comes as Ericsson prepares to exit its mobile chip joint venture with STMicroelectronics N.V. (NYSE:STM). The company announced today that it had finished reducing its presence in Sweden, including the elimination of almost 1,400 jobs.
Today Bloomberg cites sources who say a transaction between Microsoft Corporation (NASDAQ:MSFT) and Ericsson could be announced within weeks. The software that’s the subject of the negotiation is Microsoft’s IPTV, also known as MediaRoom, which is used by a number of phone companies to use an Internet connection to deliver television into homes.
If Ericsson (NASDAQ:ERIC) (STO:ERIC-A) (STO:ERIC-B) does make a deal with Microsoft to buy the software, it would become better positioned to compete with television providers. It would also help the company increase its focus on services and software as competition heats up in the hardware side of electronics.
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Meanwhile Microsoft is expected to focus on providing television through its Xbox gaming console. By selling its IPTV business, the tech giant is moving into more direct streaming services rather than selling software for use by companies like AT&T Inc. (NYSE:T), which uses the software to combine television with Internet in its U-Verse packages.
Microsoft has been making deals with various TV content providers through its Xbox Live service. Thus far it has signed deals with ESPEN and Viacom, Inc. (NASDAQ:VIAB).
Shares of Ericsson (NASDAQ:ERIC) (STO:ERIC-A) (STO:ERIC-B) fell less than 1 percent at the NASDAQ on Wednesday morning while Microsoft Corporation (NASDAQ:MSFT) rose less than 1 percent.