Sony Confirms Restructuring Plans And Vaio Sale

After several days of speculation, Sony has confirmed plans to restructure its electronics business and sell the poorly performing Vaio PC division to a Japanese investment fund.

As part of the drive to return to profitability, the company will also split the loss-making TV division into a separate unit, and renew its focus on mobile devices. Sony is responsible for a moderately popular range of Xperia smarphones and tablets based on Google’s Android OS, including waterproof Xperia ZR and Xperia Z Ultra.

Sony’s current market share stands at between 6 and 7 percent, but at Mobile World Congress last year, Sony told TechWeekEurope that it wanted to become the third largest smartphone manufacturer in the world.

Not the Sony we know

On Saturday, Japanese broadcaster NHK reported that Sony was planning to sell the PC division to Chinese rival Lenovo – already the largest PC manufacturer in the world. Sony later denied these claims, but did say it was looking at “various options for the PC business”.

Four days later, Nikkei published a similar report, this time about Vaio being sold to Japan Industrial Partners. The latter turned out to be true, with Sony maintaining a five percent stake in the new venture, which will keep the Vaio brand name.

Meanwhile, the TV business, which hasn’t made annual operating profit since 2004, will be spun off into a separate unit by July 2014.

According to Reuters  the restructuring will result in a loss of 5,000 jobs in both TV and PC divisions by March 2015. In the long run, the changes will allow the company to save 100 billion yen ($£604 million) a year, but at first, they will make a negative impact on the balance sheets.

Sony previously expected an annual profit, but is now predicting a net loss of 110 billion yen (£664 million) in the fiscal year ending in March.

Sony’s Vaio brand, launched in 1996, currently includes laptops and desktops alongside some rather unusual offerings that attempt to compete with smartphones and tablets. These include the Vaio Fit, described as a ‘multi-flip PC’, which can act as a laptop, tablet, or simply a screen, in a similar fashion to Lenovo’s Yoga hybrid device.

Research by Canalys suggests that in 2014, tablet shipments will continue to grow at the expense of traditional PCs. Over the course of the year, analysts expect manufacturers to ship 285 million tablets, 192 million notebooks and 98 million desktop PCs. IDC previously estimated that tablet shipments will overtake PC shipments by 2015.

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