Sony Shakes Up, Breaks Up Struggling TV Unit
November 1, 2011 4:15 PM
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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 (
) television unit. Sony has a hand both in manufacturing LCD displays -- via a joint venture with Samsung Electronics Comp., Ltd. (
) -- 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
by the business daily
, 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 [
] 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. (
[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.
Nikkei via Reuters
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RE: Who would have thought?
11/3/2011 9:42:35 AM
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.
"Well, we didn't have anyone in line that got shot waiting for our system." -- Nintendo of America Vice President Perrin Kaplan
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