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Sony eyes sale of PC business

Bloomberg

Sony Corp. is in talks to sell its Japanese personal computer business to buyout firm Japan Industrial Partners Inc., according to a source with knowledge of the situation.

A memorandum of understanding for a sale, which will include the Vaio brand, could be released soon, the source said, asking not to be identified before a public announcement.

Sony may announce a wider restructuring that includes job cuts as it considers what to do with its PC operations in the rest of the world, the source said.

Cutting PCs would bolster Chief Executive Officer Kazuo Hirai’s efforts to improve results in the consumer electronics group, which has struggled with shrinking demand for key products and a consumer shift to tablet computers.

Sony, which was to report third-quarter results Thursday, posted second-quarter losses at the unit making PCs, cameras and televisions.

“Selling the PC operation is positive for Sony in the long term,” said Junya Ayada, an analyst at Daiwa Securities Group Inc. “The PC is being robbed of the consumer market by tablet computers.”

Sony’s PC business could fetch ¥40 billion to ¥50 billion, the Nikkei newspaper reported Wednesday.

Sony is considering various measures for its PC business, Mami Imada, a company spokeswoman, said Wednesday. The company on Monday denied an NHK report it was discussing creating a venture for the unit with Lenovo Group Ltd.

Sony’s sale plan only includes the Vaio operations in Japan, where the brand has a stronger presence and focuses on selling to business customers, the source said. The company may close its PC business overseas or sell more assets to Japan Industrial, the source said.

Japan Industrial, founded in 2002, is a private equity firm that buys units of large Japanese companies.

“People are recognizing the consumer PC market is in tough straits,” said Bob O’Donnell, chief analyst at Technalysis Research, a California-based consulting firm. “Sony’s challenge with Vaio has been trying to pull together a story that sells.”

Industry shipments fell 10 percent in 2013, marking the worst year on record, tech research firm Gartner Inc. said last month.

Unit sales of PCs had a “significant decrease” in the fiscal second quarter, Sony said Oct. 31. Sales of smartphones rose 68 percent, helping the division that includes PCs, phones and tablets narrow its loss to ¥900 million from ¥23.1 billion a year earlier. PC revenue rose 1.5 percent.

On a global basis, Sony’s PC market share stood at 1.9 percent at the end of September, down from a peak of 2.5 percent in 2010, tracking firm IDC said.

“They have tried to have more lower-priced models, but still play mostly in the high-end space, with average prices higher than most of the top 10 PC vendors in the world,” said Jay Chou, a research analyst for IDC.