Sony Selling of VAIO Computer Business

Sony Corporation has announced the selling of its PC business to Japan Industrial Partners (JIP) in a deal valued at $490 million. Sony expects to conclude the definitive agreement of sale by end of March 2014 and expects to complete the sell-off by July 1, 2014.

Sony said that it will stop manufacturing and sales of PCs after the launch of its Spring 2014 line-up but will continue supporting Vaio customers even after the completion of the deal.

What could unnerve several Sony partners in India is that JIP will initially concentrate on sales of PCs in the Japanese market only and seek to optimize its sales channels and scale of operations, while evaluating possible further geographic expansion

Sony_VAIO
Sony to sell VAIO

What could unnerve several Sony partners in India is that JIP, in the joint press statement, said that it will initially concentrate on sales of PCs in the Japanese market only and seek to optimize its sales channels and scale of operations, while evaluating possible further geographic expansion.

This may result into JIP completely exiting many geographies including India in the near- to mid-term in order to consolidate and stabilize its Japan operations.

Sony said that the decision to sell the PC business came after 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 Vaio sale was announced along with Sony’s earnings results for Q42013, in which it posted an operating loss of $123.29 million for the Mobile Products and Communications unit, which is responsible for PCs.

The exit from the PC business, the company said would allow it to concentrate on its smartphones and tablets business.

The exit of Sony from the PC market is in line with the massive consolidation underway in the PC ecosystem. “The PC market outlook is bleak, and this may not be the last exit by a leading PC player this year. Sony obviously thinks that exiting PC business and focusing on more profitable mobility business will yield better results,” said Vishal Tripathi, Principal Analyst, Gartner.

In India, top national OEMs like Wipro and HCL have already announced exit from the PC market. There have been ongoing speculations of Acer and Asus merging their PC business for the past several months, although it has been denied by both companies. Many analysts believe that several smaller players like Samsung, Toshiba, Fujitsu may be compelled to exit the PC market sooner than expected.

The PC market has been shrinking at a rate faster than anyone expected. According to research findings, the PC market has shrunk from 381 million units in 2011 to 314 million units in 2013 and is further expected to shrink to nearly 280 million in 2014.

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