For the past few days, there were several rumors which suggested that Sony was planning to sell of its VAIO PC division to a Japanese company. Looks like these rumors were spot on as the company today announced the sale of its VAIO PC business to Japan Industrial Partners (JIP), an investment fund company.
JIP will take control of Sony’s entire VAIO business and consequently, Sony will “cease planning, design and development of PC products.” The deal will be finalized by the end of March this year for an undisclosed amount. However, Japan’s Nikkei reported today that the deal could be worth 50 billion Yen which comes to around $490 million.
Reason for Sale
According to the company, one of the major reasons for the sale was the many drastic changes that have come across the PC industry in the past few years. PC sales are declining gradually, affecting the overall profit making capacity of the company. Sony’s VAIO business was no different as it was underperforming as compared to the other divisions of the company. Further, the company is reportedly suffering losses as high as 110 billion Yen which comes to around $1.1 billion for the entire year of 2013. The increased losses along with the slump in the overall PC business forced it to sell off its PC division to focus on many of its profit making divisions.
Along with the sale of the brand, the company will cut around 5,000 jobs globally (around 1,500 in Japan itself). However, the new company has promised that it will hire around 250 to 500 employees to work in the design, manufacturing and sales department. The VAIO business with the new company will operate from the current HQ itself, based in Nagano. Further, the new company has promised that it will fulfill all aftersales warranties of existing VAIO devices in the market. Also, Sony will be investing 5 percent of the capital of the new company for its launch and transition process.
With this sale, Sony aims to refocus on post PC era products like smartphones and tablets along with its console and TV business. In this regard, the company has already made plans to spend around 20 billion Yen in restructuring its PC and TV segments, focusing on high end and 4K TV sets. With this change, the company hopes to make its TV segment a profit making business by the end of 2015.
Further, the company will focus on its gaming console, PS4 which sold around 4 million units last holiday season along with its smartphone division, which is not doing so well as compared to its competitors like Samsung and Apple.
Although selling off its PC division was a hard decision for the company, maybe it’s for the good. With increased focus on its (possible) profit making areas, Sony may finally be able to stand up to its giant competitors like Samsung and Microsoft by releasing high quality innovative products like it once did.
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