Sony is still struggling to make its TV business profitable, so CEO Kazuo Hirai intends to spin off the TV business into a separate unit, and focus more on high-end 4K and Full HD models from 2014.
TV business still not profitable
Sony expects a loss of ¥110 billion– or $1.1 billion USD – for the fiscal year ending March 2014. They have confirmed that they are selling of its VAIO PC business and they will also spin off the TV division into a separate, wholly owned subsidiary by July 2014, after almost a decade of losses.
Sony intends to focus more on high-end TVs in the future, naming 4K as a key focus area. Sony also specifically mentioned OLED and Crystal LED to investors, but declined to comment further on development or plans.
It is currently unclear how spinning off the TV business will help Sony to make the unit profitable, but the new structure could allow Sony to make strategic partnership, although that is pure speculation for now. Hirai says that the new separate unit will speed up decision-making and also commented on the TV business, saying that they have no plans to sell it.
- "If you are asking if we have any plan to sell off our TV business, I can say we have absolutely no plan to do so right now," says Hirai to Reuters
- 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.