No more VAIOs: Sony sells PC business to JIP, to focus on phones, tablets and TVs
Sony has been aggressively implementing a reform strategy across its electronics business, as originally announced in April 2012. In the imaging, game and mobile businesses that Sony identified as the three core businesses that would drive the growth of its electronics business, Sony has made significant progress in executing this strategy. Sony has launched high value-added products that bring together the best of Sony's technological strengths and introduced new market-leading platforms and business models. At the same time, Sony identified PCs and TVs as businesses for which profitability improvement would be a key priority and implemented various reform measures. The reforms executed within the TV business have significantly enhanced its operational structure and product competitiveness. However, Sony now anticipates its target of returning the TV and PC businesses to profitability will not be achieved within the fiscal year ending March 31, 2014 ("FY13").
As a result of the circumstances described above, Sony is now also taking further significant steps to address reform of the PC and TV businesses, while at the same time moving forward with further optimization and streamlining of its manufacturing, sales and headquarters/indirect functions, and concentrating resources in growth businesses.
Following a comprehensive analysis of factors, including the drastic changes in the global PC industry, Sony's overall business portfolio and strategy, the need for continued support of Sony's valued VAIO customers, and future employment opportunities for personnel involved in the VAIO business, the Company has determined that concentrating its mobile product lineup on smartphones and tablets and transferring its PC business to a new company established by JIP is the optimal solution. Sony and JIP will now proceed with due diligence and negotiate detailed terms and conditions of the business transfer, targeting the conclusion of a definitive agreement by the end of March 2014. Following reevaluation of the product lineup, the new company is expected initially to concentrate on sales of consumer and corporate PCs in the Japanese market and seek to optimize its sales channels and scale of operations, while evaluating possible further geographic expansion.
As a part of the business transfer to JIP, Sony will cease planning, design and development of PC products. Manufacturing and sales will also be discontinued after the Spring 2014 lineup to be launched globally. Even after Sony withdraws from the PC market, Sony customers will continue to receive aftercare customer services. Approximately 250 to 300 Sony Corporation and Sony EMCS Corporation employees involved in PC operations, including planning, design, development, manufacturing and sales, are expected to be hired by the new company established by JIP. Sony will also explore opportunities for other employees to be transferred to other businesses within the Sony Group. For employees of Sony Corporation and Sony EMCS Corporation that are not hired by the new company or transferred within the Sony Group, Sony plans to also offer an early retirement support program to assist their reemployment outside of the Sony Group.
*Not including 64.1 billion yen equity in net losses of affiliates from the S-LCD joint venture.
While Sony now anticipates that its target of returning the TV business to profitability will not be achieved within FY13 largely due to unexpected factors such as the slowdown in emerging markets and declining currency rates, the reforms executed within the TV business over the past two years are putting the business on a path to turnaround. In particular, Sony has significantly enhanced product competitiveness and accelerated its shift to high-end models, especially in the area of 4K, where Sony has secured more than 75% market share in Japan (as of the end of December 2013, based on Sony research). Sony has also taken the number one market share in the US for 4K models (during calendar year 2013, based on revenue). TVs continue to play a vital role as the centerpiece of the home viewing experience. Sony aims to leverage the wealth of technological expertise and assets accumulated within this business as key differentiation technologies across its entire product lineup. In light of the TV business' continued importance within Sony's overall strategy, the Company has decided to execute the additional reform measures detailed below, with the aim of establishing a structure capable of delivering stable profit beginning in the fiscal year ending March 31, 2015 ("FY14").
First, Sony will shift its product mix and focus on increasing the proportion of sales from high-end models in FY14. Sony plans to reinforce the company's leading position in the 4K market by strengthening its product lineup while also bolstering its 2K models with wide color range and image-enhancing technologies. In emerging markets, Sony will aim to harness market expansion by developing and launching models tailored to specific local needs. Second, Sony will accelerate and broaden its on-going cost reduction and operational improvement measures, focusing attention across all functions relevant to the TV business, including manufacturing, sales, and headquarters/indirect functions (as outlined below). In addition, to help transform this business into a more efficient and dynamic organization, optimized in size and structure for the current competitive business environment and fully accountable for its operations, Sony has decided to split out the TV business and operate it as a wholly-owned subsidiary. The targeted timeframe for this transition is July 2014. By implementing these measures, Sony is aiming to further enhance its TV business' profit structure and return the business to profitability during FY14.
In terms of electronics sales companies, Sony plans to identify focused product categories for each specific country and region, rationalize support functions, and proactively implement outsourcing and other efficiency measures with the objective of achieving total cost reductions of approximately 20%** by the fiscal year ending March 31, 2016 ("FY15").
With respect to manufacturing sites, Sony will proceed with the further optimization of manufacturing and other operations.
Sony will also streamline Sony Corporation headquarters and support functions and expects to achieve cost reductions of approximately 30%** by FY15 within these operations.
**Compared to FY13.
In order to execute these measures, Sony is allocating an additional 20 billion yen (approximate)*** in restructuring expenses in FY13 and a further 70 billion yen (approximate) in restructuring expenses in FY14. Sony expects these measures to result in annual fixed cost reductions of more than 100 billion yen (approximate) starting in FY15.
***Total restructuring expenses in FY13 are expected to be 70 billion yen (approximate) including 50 billion yen (approximate) originally allocated.
In addition to all of the above measures, Sony will also be accelerating its process of business portfolio realignment, and refining its R&D project selection process across its electronics businesses.
1. mr.techdude (Posts: 536; Member since: 19 Nov 2012)
Sony, WHAT HAVE YOU DONE? pc is a huge part of your company and their great, I think
8. tech2 (Posts: 1762; Member since: 26 Oct 2012)
I only respected Sony for Walkman and Vaio. Now one of them is gone :(
Vaio were great product but stupidly overpriced.
16. reckless562 (Posts: 617; Member since: 09 Sep 2013)
relax, viao was just an expensive pc, nothing more. it didnt do anything special but cost u more money. if it DID do something or have a feature, PLEASE tell me, id like to know
23. amansingal14 (Posts: 283; Member since: 08 Sep 2012)
Well, it had the best design in the Windows department, with beautifully engineered exteriors in slim and lightweight body before the 'Ultrabook' term was even coined.
45. reckless562 (Posts: 617; Member since: 09 Sep 2013)
yea but those Ultrabooks are whats called a GIMMICK.
they were Sloooower, many had unexpandable memory, if u dropped it, it (the screen) was over,, and had a Smaller battery. the only reason they "lasted" longer on a charge (many didnt, and still dont) is their brain, or processor is Slooowwweer. it jus cant keep up to normal laptops. if anything, Good looking computers can be called apliences, and computers that are the top of the performance field are TOOLS. im a dude n I Like Tools :D
i NEVER considered a viao kuz i KNOW better when it comes to computers. ppl who by tech for looks over performance jus dont get it i guess. (yes if it lt performs gud AND looks good ill get it, but it still has to work)
27. Johnnokia (Posts: 463; Member since: 27 May 2012)
If they could not catch up with the cellphone business, they might sell this division as well.
46. 777light777 (Posts: 53; Member since: 14 Aug 2013)
I love how people always say a product is "overpriced".
(without knowing the work put into one)
Apple Macbook = worth the money (lol)
Sony Vaio/Pro = overpriced (wat)
Asus Zenbook Infinity = overpriced (:D)
Samsung Ultrabook = overpriced ('-')
Apple does not set the price of the industry!
(a lot of these are nicer than a Macbook, so they can be priced higher)
33. Miracles (Posts: 458; Member since: 31 Aug 2013)
Well at least I got one of the last Vaios. This ruins my day.
2. rodneyej1 (Posts: 3208; Member since: 06 Jul 2013)
Well, maybe they can put some of the extra resources into making a few high end WP devices.. Maybe a low end device as well... Either way, Sony could give the Lumia brand some serious competition if they really tried..
4. XperiaOptimusOne (unregistered)
Part of me just died.
5. ady_lad (Posts: 73; Member since: 17 Jul 2013)
I know that many people have an emotional connection with Vaio but from personal experience I found Vaio to be overpriced and disapointing. Comparing my Vaio with the Toshiba that I had earlier I found Toshiba to be a lot better. Saying this while I got a few Sony products... Sony DSLR, PS3's, TV's and other stuff.
6. SleepingOz (unregistered)
The Vaios were arguably the most beautiful PCs out there, way too overpriced though.
14. XperiaOptimusOne (unregistered)
+1 They pretty much priced themselves out of the market.
44. emadshiny (Posts: 1127; Member since: 05 Dec 2012)
Nope, VAIO pro costs more than Macbook Air 2013.
What if Sony priced its laptops more logically? SIGH...
47. luxzy801 (Posts: 134; Member since: 16 Jun 2010)
it better, for 150 dollars more, you get a capacitive touch screen hybrid tablet/notebook, NFC and 1080p screen. While the only advantage the MB Air has is a longer battery life. All the other specs are a match.
I dont see how its not logically priced?
48. Miracles (Posts: 458; Member since: 31 Aug 2013)
Air costs more or nearly same as the Vaio Flip.
7. asterodroider (Posts: 1; Member since: 06 Feb 2014)
That`s nonsense. Vaio was and will be the best PC ever. This information is fake.
9. XperiaOptimusOne (unregistered)
10. xperiaDROID (Posts: 5047; Member since: 08 Mar 2013)
Noooooooooo...Vaio must continue, Sony!
11. kevkyle (Posts: 62; Member since: 21 Oct 2012)
what?......my vaio pro is just a month old....i was hoping there would be more to come in the decades ahead - so sad ",(
12. emadshiny (Posts: 1127; Member since: 05 Dec 2012)
If they can bring their great experience to tablet division and price them more logically, then it would be a great success.
From now on they must use VAIO brand for their tablets and leave Xperia to phones. Sony must not kill the VAIO name.
15. amansingal14 (Posts: 283; Member since: 08 Sep 2012)
If you wanted a laptop, you got Dell, Acer, HP, Lenovo etc., but if you wanted a beautifully designed laptop, you got an Apple or a VAIO. Its sad the only one bundling Windows in the package does not exist anymore...
VAIO, you will be missed...
17. Leonis (Posts: 331; Member since: 08 Jan 2014)
Sad to see Sony leave the PC market. But they can always buy back if they want to one day. Now when they can focus on smartphones, tv and tablets I expect some truly amazing things to come out. Especially the phones to be top notch. Make a tablet that will be like a PC! Problem solved..
18. boosook (Posts: 896; Member since: 19 Nov 2012)
Oh, come on! How many of you that are whining do actually own a Vaio PC? Most likely, when you had to open your wallet, you chose to buy another (cheaper) brand.
21. amansingal14 (Posts: 283; Member since: 08 Sep 2012)
I do, and I love it. Although it may seem to be overpriced for the specs they gave, but the speed/stamina mode conversion and extended online support, bundled with the beautiful design made it a 'totally worth it' package. Which other manufacturer bundles in a way to restore factory settings on laptops as in phones? None, I think.
Sent from a VPCSA35GG
36. genkidama20 (Posts: 31; Member since: 10 Feb 2012)
Most PC companies do what you listed... In fact, you can restore back to factory with the click of a button on all Lenovo, HP, Asus, etc...
20. ausnote2 (Posts: 70; Member since: 07 Dec 2012)
so sad, i am still rocking 2 sony vaio z with the build in dvd drive before removing.
kinda diggin the sony vaio pro 11. might buy it in the coming weeks
22. pyradark (Posts: 738; Member since: 10 Jun 2012)
I have a high salary now and ready to but a vaio tap 11
and this news came up!! I've been dream to have a vaio
I already have my first Sony xperia which is the z ultra!!
super sad!! Guess I have to go with Acer as their headquater is near on our country.
24. IliyaBeshkov (Posts: 240; Member since: 09 Jul 2012)
Noooo.. When it comes to design, Sony laptops are the best!!
25. Doakie (Posts: 1099; Member since: 06 May 2009)
I didn't even realize Vaio was still a name brand. The 2000s called, they want their brand back. Now that it's ticked over to a new decade I don't even think of PC market movements anymore. Every once in a while I have to view a desktop only website, or print something then I'm forced to fire up Windows. Other than that my 8 month old touch screen Windows 8 Acer laptop just sits there gathering dust... Sorry my apathy seems to be hanging out. What's new in Android land?
31. papss (unregistered)
Just shows how Sony is struggling overall as a brand. I personally feel most of their products are priced a bit high.
32. jibraihimi (Posts: 649; Member since: 29 Nov 2011)
Really very bad news, feeling very nostalgic, as my first job was as tech support executive for vaio laptops...........
35. genkidama20 (Posts: 31; Member since: 10 Feb 2012)
Good move by Sony. Their PC business was going down the drain fast. Good thing they are getting rid of it before it drug the rest of the company under. Lenovo and the other PC companies have been much more innovative and seems to be driving Sony straight out of the market.
37. rusticguy (Posts: 2818; Member since: 11 Aug 2012)
Another windows bites the dust. Why pay just for WINDOWS (OS) when you can get FULL House (LINUX) for free :)
38. ngyixian96 (Posts: 75; Member since: 05 Feb 2012)
Sony should cooperate with Apple.
It will form a great hardware and great software company ever.
Beside , VAIO is suck if it still using windows
because windows sucks
43. Miracles (Posts: 458; Member since: 31 Aug 2013)
They could. But Windows is cool too. I have both.
40. Taters (Posts: 2584; Member since: 28 Jan 2013)
I was going to get a vaio tap 11 once they could fit it into an Xperia Tablet Z body. Now I have to wait until the Surface Pro finally goes on a much needed diet I guess. Or maybe Samsung will decide to make an Ativ Book 9 tablet that is the same size as the note 10.1 with full windows 8.
50. gundamexia450 (Posts: 19; Member since: 21 Dec 2011)
Please tell me this is a joke, I only buy VAIO computers. Can never trust any other brand for it. SMH