Sony is selling its PC business to Tokyo-based investment fund Japan Industrial Partners (JIP) and plans to lay off 5,000 workers by the end of fiscal year 2014, marking the latest PC maker to rethink its strategy after 2013 returned the worst-ever sales for the PC market.
Sony is saying goodbye to its Vaio line, which could largely disappear in markets outside Japan, according to PC World. The Japanese electronics maker plans to focus on smartphones and tablets instead.
The company will stop making PCs after the launch of its spring lineup, and plans to also spin off its lackluster TV business into a wholly owned subsidiary by July. As a result, Sony expects to cut approximately 1,500 jobs in Japan and 3,500 overseas in markets where it operates.
Sony did not announce the price the PC unit sold for, but Japanese business daily Nikkei estimated it to be 40 billion to 50 billion yen ($395 million to $493 million). That sale will help the struggling consumer electronics giant, which lowered its financial projections to a net loss of 110 billion yen ($1.1 billion) for the fiscal year that ends in March.
As Sony looks to jettison its PC unit, it joins a growing group of other hardware makers that are taking or have considered similar steps. Global PC shipments fell 10 percent last year, research firms Gartner and IDC reported, which may be prompting some hardware markers to engage in self-reflection, even though the decline is beginning to flatten.
HP’s Love-Hate Relationship With PC Unit
In 2011, former HP CEO Leo Apotheker proposed selling HP’s PC business, but he didn’t last long enough in the job and new CEO Meg Whitman nixed that idea. Instead, it was rumored that she toyed with the idea of combing the PC and printer businesses in 2012, as part of a major restructuring that has since resulted in thousands of workers losing their jobs. But HP still has its personal systems division, which includes PCs, as a standalone business – for now.
And the former PC boss, Todd Bradley, is expected to be leaving the company any day now, along with former enterprise boss David Donatelli. Reuters reported they disagreed with Whitman’s decision to focus on the enterprise, rather than taking on Apple or Samsung in mobile computing.
IBM Steps Further Away From Computers
IBM beat everyone to the punch, having sold its PC business to Lenovo in 2005. Turns out Big Blue is continuing to get further away from hardware, announcing last month it plans to sell its x86 server business to Lenovo too. Despite the sale, Lenovo plans to offer jobs to 7,500 IBM employees from the server business.
In its reorg, Lenovo is dividing its two business divisions into four: PC, Mobile, Enterprise, and Ecosystem and Cloud Services.
And amid these companies’ rush to cash in on the mobile bandwagon, Zal Bilimoria, partner at Andreessen Horowitz, says our love affair with tablets is already over. In a post on Re/code, he says people have figured out they only need a desktop and their phone. He doesn’t expect tablets to disappear, but market saturation may have been reached in just four years.