Sony To Divest VAIO Brand, Exit PC Business
- By Gladys Rama
- February 06, 2014
Consumer electronics giant Sony announced on Thursday that it plans to sell off its VAIO line of PCs in a move that effectively takes the Japan-based company out of the PC market.
Sony's decision comes as part of a broader restructuring effort to address its struggling PC and TV businesses. Despite implementing "various reform measures" since 2012 to return those two product groups to profitability, Sony says it does not foresee that happening by the end of its 2013 fiscal year in March.
As a result, Sony will sell its PC business, which operates under the VAIO brand, to investment group Japan Industrial Partners (JIP). While Sony says it will still provide customer aftercare services, the sale of its VAIO line essentially signals an exit from the PC market.
"As a part of the business transfer to JIP, Sony will cease planning, design and development of PC products," Sony noted in its announcement. "Manufacturing and sales will also be discontinued after the Spring 2014 lineup to be launched globally."
Going forward, Sony says it will focus on its smartphone and tablet products in response to the "drastic changes in the global PC industry."
Under the terms of the deal, JIP will spin off a new company to sell the VAIO PCs, with an initial focus on the Japanese market and, later, possible expansion into other locations. Between 250 and 300 Sony employees in PC-related positions are expected to transfer to the JIP company.
Rumors that Sony was planning to divest its PC business surfaced Wednesday. The Nikkei Asian Review estimated the deal to be worth between $391 million and $489 million, though Sony and JIP have not yet finalized their negotiations. The two companies expect to reach an agreement in March, and the sale to be completed by July 1.
Elsewhere in the restructuring effort, Sony says it will break off its TV business into a wholly owned subsidiary that will focus on specialized, high-end models. Sony expects to reduce its headcount by 5,000 employees in the restructuring.
Gladys Rama is the senior site producer for RCPmag.com and senior editor of AWSInsider.net.