Sony’s PC business crashes

By on February 10, 2014

Sony has finally given up the game with personal computers (PCs) and has decided to sell its VAIO brand, after failing to refresh its computer business. And to think, VAIOs were once desk candy second only to Apple Macs.

The Japanese company announced it was axing 5,000 jobs, in an attempt to avoid drowning as it jumps from its sinking computing ship. Clearly Sony was still feeling more sumo than svelte, having already laid off 10 000 people since April 2012.

The former electronics behemoth slashed its full-year earnings forecast to a loss of R12 billion, having chopped its profit estimate 40 percent to R3 billion only three months ago.

Sony’s computer business has struggled as consumers switch to tablets and smartphones, which have pushed worldwide PC sales down for the last six quarters. However, smartphone sales will cheer the company up a bit – they pushed revenues in the company’s phones and computer division up 44.8 percent year-on-year to just shy of R50 billion in the three months to January.

Sony also announced that it is spinning out its loss-making TV business into a wholly-owned subsidiary, presumably so it can make a quick escape if sales continue to flounder. The company has been trying, unsuccessfully, to squeeze profit out of its TVs since the end of 2011.

“There’s no prospect of its TV business being profitable,’ says Myojo Asset Management’s Chief Executive Makoto Kikuchi emphatically. “Sony’s strengths are content such as games and movies. It cannot increase profit without moving its focus from TV production to content.”

The big hurdle Sony has to cross is to figure out what it actually does: does it make mobiles? Games? Films? Shedding the PCs is just the beginning.

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