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Last week’s Sony Ericsson buyout may be even more significant than we thought: Sony now intends to pull out of its joint LCD venture with Samsung, Reuters reports. That means it won’t make panels for its own TVs, but rather outsource them.
It’s an attempt by Sony to cut costs, seeing as it’s approaching its eighth straight annual loss in the TV business. It’s thought it’ll focus on mobile phones following its buyout of Sony Ericsson.
LCD panels are also plummeting in price due to a global oversupply, according to the Nikkei business daily, making it harder for Sony to make a profit.
A South Korean newspaper reported back in July that the break-up of the joint venture was on the horizon, but Sony denied it. Both companies declined to comment when asked by Reuters.
A source in Seoul told Reuters there could be some confusion because Sony has been in talks with Samsung over its return on investment in the joint venture, rather than shareholdings. So it could be Sony is just at the discussion stage.
Sony will announce its July-September financial results on Wednesday, and analysts predict it’ll fall short of expectations. It’s already sold off TV factories in Spain, Slovakia and Mexico in recent years. Further cost-cutting in the loss-making TV business and ploughing its efforts into mobile would seem a sensible decision.
Last week Sony announced it was buying up the remaining share of Sony Ericsson, taking complete control of its mobile division to mount a more effective challenge to Apple and Samsung’s dominance.
Apple, meanwhile, is rumoured to be working on a TV, flipping the script. It’s like a tech version of Bizarro World.
Is Sony right to invest more heavily in mobile? And should Apple be dipping its toes in the standalone TV market? Let us know on our Facebook page or down in the comments.
