The decision on Sony, ending its PC business, branded as “Vaio”, came when they announced their results of Oct-Dec. In the results Sony posted an operational loss of 12.6 billion Chinese Yuan for the Mobile Products & Communications unit that is responsible for manufacturing PCs. This decision was shocking as these results were better than the previous loss of 21.3 billion Chinese Yuan. But continued losses could have made Sony to take such a step. Once famous for its high end devices which were the second choice after Apple in the market have now been unable to make a pace with the moving market trends and has announced the saddest departure after being in PC manufacturing business for past 17 years.
However, Sony will continue manufacturing tablet PCs, and mobile devices including Smartphones. There are also reports that Sony has showed their interests in Microsoft’s Windows based Mobile devices and has been in negotiations, for this venture, with Microsoft. Other than the mobile segment, Sony has also sought to eye the high end TV market, which has been lacking behind losing more than 7 billion dollars from 2004. As the competitors like Samsung have shadowed its TV business Sony has started to feel the jitters now and it is now evident with this big step forward.
Buyer of the Vaio brand, the Japan Industrial Partners (JIP) a Tokyo based Investment firm, will take over the PC Brand and sell PCs initially in Japan only. Reports suggest that Sony has sought to sell the “Vaio” brand for about 40 to 50 Billion Chinese Yuan, keeping a 5% stake in the newly established firm.
As the story goes, Sony will halt making and selling PCs, but about a hundreds of its employees will be retained by the new firm, which is to be based at the hub of Sony’s present PC business in Japan’s Nagano Prefecture. However, whether or not Sony will carry on producing products under the “Vaio” brand name remains to be visualized, Sony said.
Meantime, Sony will try its best to revamp the TV business into a completely owned subsidiary unit by July 2014, plunging it out from the decade of losses that it had to face. Sony feels that after splitting out this TV business, swiftness of the management will pick up pace and retorts to markets will be dynamic. They also feel that in future, going ahead, cooperation among Sony’s separate business units will bode well for Sony as one entity.
Further on the employees’ front there is another bad news that Sony is also seeking to shed around 5000 jobs buy the year ending 2015. 1500 of these jobs will affect employees in Japan and 3500 of these would affect people overseas. This step is also aligned to aid proper functioning of its TV business, which has been taking toll lately.
Rachit Agarwal
