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After eight years of quarterly losses, the company is a bit worried

The LCD era has not been kind to Sony Corp.'s (TYO:6758) television unit. Sony has a hand both in manufacturing LCD displays -- via a joint venture with Samsung Electronics Comp., Ltd. (KS:005930) -- and, like Samsung, in selling assembled LCD TVs.  Unfortunately, Sony's LCD ambitions have failed to produce a single annual profit eight years into the experiment.

Faced with its eighth year in a row of losses, Sony is shaking up its TV division.  According to a report by the business daily Nikkei, Sony is negotiating with Samsung on a buyout of its 50 percent manufacturing stake in the LCD joint.

In terms of official changes, Sony has committed to immediately splitting its TV unit into three new units.  One unit will be tasked with sales of LCD TVs, another will head outsourcing manufacturing to cheaper foreign facilities, and a third unit will be charged with developing future TVs.

Sony spokeswoman Ayano Iguchi comments, "By dividing into three divisions, we will make clearer the mission and responsibilities of these."

Sony has suffered from a variety of problems this year.  Some -- like a strong yen, which cuts into profits, and faltering consumer confidence due to the global recession -- have affected the company's peers in Japan and abroad.  Other problems are more unique to Sony, such as the series of massive privacy breaches [1][2][3][4][5][6][7][8] that occurred earlier this year when Sony lost approximately 100 million gamers' personal information, including credit cards for some.

The company's TV unit has also had some expensive recent misfires.  After being the first Japanese manufacturer to go commercial with an OLED TV design, Sony has pulled the plug on the project for now, after disappointing sales.  Likewise, Sony's Internet TV project with Google Inc. (GOOG) has struggled mightily in sales.

Sony Internet TV
[Source: Stuart Ramson]

Given these diverse factors conspiring to cut into Sony's profits, analysts are predicting the company to fall short of its predicted ¥200B ($2.555B USD).  

In the past Sony could afford to pour money into its struggling LCD TV venture.  But with its budget tightening, the company its pondering the first in what may be a series of major cuts and changes.

Source: Nikkei via Reuters



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Who would have thought?
By Slyne on 11/1/2011 5:13:39 PM , Rating: 3
quote:
After being the first Japanese manufacturer to go commercial with an OLED TV design, Sony has pulled the plug on the project for now, after disappointing sales.

Really, $1,750 for an 11 inch TV, it didn't sell? Who would have thought?




RE: Who would have thought?
By bug77 on 11/1/2011 6:15:49 PM , Rating: 3
Especially since there's an enormous market for regular 11" TVs. Go figure...


RE: Who would have thought?
By TSS on 11/3/2011 9:42:35 AM , Rating: 2
It's too bad though. I saw one of these puppies on display when i went shopping for my new TV. Even though it was small it stood out right away because the colors where just so vibrant. Pretty impressive having nearly 200 square feet of TV's and instantly focussing on a small 11" display on a low shelf.

If they'd make a 35-45 inch model for the same price i'd buy it.


RE: Who would have thought?
By someguy123 on 11/1/2011 6:28:09 PM , Rating: 2
I know it was expensive as all hell, but I really wish the wealthy scooped it up to give sony more incentive on OLED TV development.

They're amazingly beautiful and respond instantaneously. If only they could get the manufacturing process down.


RE: Who would have thought?
By Odeen on 11/3/2011 1:07:16 PM , Rating: 2
The fact that it wasn't HD didn't help either. If it's going to look that beautiful, you bet my nose will be close enough to it to tell the difference.

1080P or GTFO.


RE: Who would have thought?
By tastyratz on 11/3/2011 8:50:08 AM , Rating: 2
HAH, if only it was JUST the oled tv. I would love to see more oled development but in reality Sony did not make THAT nice of a tv but demanded a 2011 price premium for a 1990s brand recognition. Sony is no longer the houeshold name equating to quality it used to be. They have long since pissed off their customers with cheap short lasting components the last decade and customers realize it. My entire home theater used to be Sony ONLY, but now I refuse to own just about anything but a ps3 and I wish even THAT was offered somewhere else. Strong yen? Try consumer confidence and alternative choice.


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