Sony agrees to sell PC business to Japan Industrial Partners

Sony Corporation today said that it has entered into a memorandum of understanding with investment fund Japan Industrial Partners (JIP) to sell its PC business currently operating under the VAIO brand.

Sony and JIP hope to conclude definitive agreements by the end of March 2014, following due diligence and negotiation of detailed terms and conditions of the sale.

Nikkei business daily  had reported earlier this week that Sony was in talks to sell its loss-making Vaio personal computer division to JIP, and the  said that Sony's PC business could fetch around 40 billion yen ($400 million) to 50 billion yen. (See: Sony in talks to sell Vaio PC unit to Japan Industrial Partners)

The Tokyo-based company said that JIP will form a new company for the acquisition, which will be based at its Nagano Technology Site  in Azumino City, the hub of Sony's current PC operations. 

The new company will conduct operations for its VAIO-branded PC business as an independent business entity, including planning, design, development, manufacturing and sales.

The new company will initially concentrate on sales of consumer and corporate PCs in the Japanese market and evaluate possible further geographic expansion.

The new company will be set up and operated with capital investment from and management support from JIP. Sony will initially invest 5 per cent in the new company and hold a minority stake.

As part of the sale, Sony will cease planning, design and development of PC products. Sony's manufacturing and sales will be discontinued after the spring 2014 lineup, but its customers will continue to receive aftercare customer services from the new company.

Sony said that it took the decision to exit the PC business due to the drastic changes in the global PC industry, and now plans to concentrate on its mobile product lineup on smartphones and tablets.

Buyers are not prioritising PC purchases, preferring to spend on alternative devices such as smartphones and tablets since their requirements, such as entertainment and information access, can be addressed by devices other than PC's.

Global PC shipments declined 6.9 per cent, registering the seventh consecutive quarterly fall, to 82.6 million units in the fourth quarter of 2013, according to reports by Gartner and IDC last month. (See: PC sales in Asia hit by hand-held devices: IDC)

For the year, PC shipments were 315.9 million units, a 10 per cent decline from 2012. This is the worst decline in PC market history, equal to the shipment level in 2009.  Worldwide PC shipments are forecast to total 278 million units in 2014, down 7 per cent from 2013, Gartner said in its report.

Sony's PC global market share was 1.9 per cent at the end of September, down from a peak of 2.5 per cent in 2010, according to tracking firm IDC.