Tech giant Sony Corporation has confirmed that it will sell its VAIO brand to Japanese Industrial Partners on account of slumping personal computer business.
After several rounds of rumors and speculations, Sony Corporation has finally announced its unfortunate exit from PC and laptop business by handing over its VAIO brand to Japan Industrial Partners (JIP). The final seal on the deal will take place by the end of March 2014 and will involve an exchange of close to 50 billion Japanese Yen.
A number of reasons have been cited by Sony for the said move – the biggest one being, dwindling sales and demand for its products in the current lack-lustre PC segment. The electronics giant states that is difficult to turn around the PC operations at a time when consumers are rapidly moving onto tablets and smart phones. The slump period coupled with price competition with domestic and foreign rivals, including Chinese and Taiwan companies has permanently sealed any scope for sales revival.
Sony’s PC shipments had peaked back in fiscal 2010 with total sales of 8.7 million units. Post March 2011 however, the company witnessed a sharp decline in sales – 7.6 million units in fiscal 2012 – on the back of rapid dissemination of smartphones. Barring the VAIO Flip 11A, the Japanese tech giant doesn’t really have much to show for its VAIO range. Sony has reportedly, wrapped up its designing and development department, while the manufacturing and sales verticals will shut down once the company’s final VAIO range goes on sale globally.
So what’s next for Sony? Well, the company has now decided to focus solely, on the post-PC products – meaning, smartphones and tablets – that have projected significant increase in sales in the last quarter. Sony’s games arm, PlayStation 4 has also shown sizable promise by clocking sells of around 4.2 million units and 9.7 million games within just first six weeks of its launch. The game arm also saw a dramatic increase in PlayStation Plus subscriptions, which is mandatory for multiplayer on the company’s new console.
On the other hand however, the aforementioned decision is likely to take away jobs from over 5,000 Sony employees worldwide – 1,500 in Japan – by the end of the 2014 fiscal year. The new PC company on the other hand, has stated that it will hire around 250 to 300 Sony employees for its design, development and sales department. This new PC company will be based in Nagano Prefecture, where Sony’s current VAIO HQ resides.
The new entity that will take over the VAIO brand will continue to provide warranty and after-sales services to existing customers and will also continue to maintain operations in overseas market where the VAIO brand has gained popularity. On the off side, the new PC company will indeed, withdraw from most countries and regions, which show no scope for the brands’ revival.