Sony in talks to sell Japanese PC business

Negotiations with Japanese buyout company would help group efforts to boost results

PUBLISHED : Wednesday, 05 February, 2014, 11:32am
UPDATED : Thursday, 06 February, 2014, 4:14am

Sony is in talks to sell its Japanese personal-computer business to buyout firm Japan Industrial Partners (JIP), a source said.

A memorandum of understanding for a sale, which will include the Vaio brand, may be released as early as today, the source said. Sony is considering what to do with its PC operations in the rest of the world, which may include closing Vaio or selling more assets to JIP, the source said.

Cutting the PC unit would help Sony chief executive Kazuo Hirai's effort to improve results in the consumer electronics group, which has struggled with shrinking demand for key products and competition from lower-cost producers in mainland China.

Sony, which reports third-quarter results today, posted losses at its units that make PCs, cameras and televisions in the second quarter.

"People are recognising the consumer PC market is in tough straits," said Bob O'Donnell, chief analyst at Technalysis Research in California. "Sony's challenge with Vaio has been trying to pull together a story that sells."

Sony's PC business could fetch 40 billion (HK$3 billion) to 50 billion yen, Nikkei reported yesterday.

Sony was considering various measures for its PC business, a company spokeswoman said yesterday.

On Monday the company denied an NHK report it was discussing creating a venture for the unit with Lenovo.

Sony's sale plan only included the Vaio operations in Japan, where the brand has a stronger presence and focuses on selling to business customers, the source said.

PC sales saw a "significant decrease" in the fiscal second quarter, Sony said in October.

But sales of smartphones rose 68 per cent, helping the division that includes personal computers, phones and tablets to narrow its loss to 900 million yen from 23.1 billion yen a year earlier.

PC revenue increased 1.5 per cent.

On a global basis, Sony's PC market share stood at 1.9 per cent at the end of September, down from a peak of 2.5 per cent in 2010, according to tracking firm IDC.

"They have tried to have more lower-priced models, but still play mostly in the high-end space, with average prices higher than most of the top 10 PC vendors in the world," said Jay Chou, a research analyst for IDC.

Sony owns a PC factory in Japan's northern Nagano prefecture and used contract manufacturers on the mainland to make Vaio notebook computers, said another company spokeswoman.

The Vaio sale will cause a full-year loss for Sony, Nikkei said.

The company has forecast net income of 30 billion yen for the year ending in March.