Sony sells PC business, will operate TV business as a wholly-owned subsidiary
Sony reports higher revenue and income due to foreign exchange rates, forecasts $1.1 billion loss
The PC business is not what it used to be, especially when a company can not make up lost sales with new sales of smartphones and tablets. That may be the lesson today as Sony announced that it would sell off its PC business – the VAIO brand – to an investment firm, Japan Industrial Partners Inc.
Sony also announced that it would change direction with its money losing TV business. The strategy is to focus on high-end models where margins are better, and to continue to reduce costs in the division. To better manage the business, Sony said it would ut the TV business and operate it as a wholly-owned subsidiary.
But Sony forecast a loss of 110 billion yen ($1.1 billion) for its fiscal year which ends in March. Chief Executive Officer Kazuo Hirai said that the company would not rule out selling off its TV business, as the company seeks to reduce costs through job cuts.
Sony earnings were effected by currency exchange rates that skewed the numbers. But its best division was gaming which saw a 64.6 percent gain in sales thanks to he Play Station 4. Its film division, despite the release of Captain Phillips, could not match the prior year’s quarter when it had released Skyfall.
“My responsibility is to turn around the electronics operation,” Hirai said. “I’d like to say this time’s reform is final but amid intensifying competition, reform may be needed going forward.”
The first move was to sell off its VAIO-branded PC business, which will now operate as a separate company out of its Nagano Technology Site in Azumino City, Nagano Prefecture. Sony, to get the company up and running, has committed to invest 5 percent of the company’s needed start-up costs, but then it will be up to Japan Industrial Partners, a turnaround firm, to see if it can wring enough costs out of the business to make it a profitable venture.