Japanese electronics giant Sony has initiated talks with an investment fund as it seeks to sell the Vaio brand it uses to sell personal computers. 5,000 jobs will be lost worldwide as Sony will turn its focus to TVs, game consoles and tablets.
Pressure from mobile devices
The investment fund, Japan Industrial Partners, is to create a new company to purchase Vaio’s Japanese branch, according to Reuters. Following the Vaio sale, Sony would want to pull out of other computer markets. The finer details of the agreement still have to be decided, but the deal would be worth 50 billion yen (360 million euro). Sony would still get to keep a small number of shares. For markets outside of Japan, Sony would plan a joint venture with Lenovo.
Sony wishes to leave the computer market, as smartphones and tablets are pressuring computer sales. According to research firm Gartner, computer sales would drop 7 % in 2014, while mobile appliances will increase 5 %.
The gaming division managed to post a healthy profit, mostly thanks to the PlayStation 4, but Sony's CEO (Kaz Hirai) is under tremendous pressure to turn the electronics giant's fortunes around - which means he has to trim down costs and cut jobs. That will result in 5,000 jobs being lost worldwide.
Profit forecast turned into huge loss
Sony had previously predicted a profit this fiscal year, but has turned that prediction around into a huge loss. The company will separate its television business, hoping to improve efficiency and transparency. This branch has to focus on the future in order to become a frontrunner once more with 4K screens.
Vaio was launched in 1996 and managed to sell 8.6 million computers in one year at one point, but last year it dropped below the 6 million marker. The Vaio sale should enable Sony to move more freely towards the smartphone market, but would result in a net loss for Sony - after years of making profits.