Sony to quit making PCs in major restructuring plan

Sony's plans to quit making personal computers and is in talks to sell its PC business to buyout firm Japan Industrial Partners (JIP) .

The pullout comes as Japan's electronics firms look for daylight beyond the shadow of industry giants like Apple and Samsung Electronics.

Exiting the Vaio PC business Sony founded 17 years ago will mark the first time chief executive Kazuo Hirai pulls a major consumer product line.

Still unclear is when Sony can catch up with local peers Panasonic and Sharp on the restructuring track. The pair have swallowed charges, sold off or cured many loss-making businesses, and bounced back to strong profits.

Sony is now in talks with JIP, a Japanese fund that buys up businesses that are being restructured, to take over the Vaio brand’s operations in Japan, according to the plan under consideration.

Financial details and final stakes in the new entity were still being discussed, the source said. Sony is scheduled to report earnings for the October-December quarter tomorrow.

The deal will follow the disposal of assets such as its New York headquarters and a major building in Tokyo last year and could presage Mr Hirai stepping up restructuring efforts, said Macquarie Research analyst Damian Thong. "The only way to fund restructuring was to receive funds in deals like this one," he said, who has an outperform rating on Sony stock.

"And if you look at the last six months, I have to say that this has been the battle strategy that Kaz Hirai has been playing." Sony said it had not announced anything about its PC business and that it was exploring various options for the unit. An official at Japan Industrial Partners declined to comment.

Today, Sony’s shares rose 4.6 per cent as investors welcomed the news on the Vaio sale. But shares in Panasonic surged 19 per cent after it more than tripled third-quarter operating profit.

Reuters