Sony agrees to sell PC business, revises forecast to loss

Sony plans to sell it Vaio PC operations to an investment fund, cut 5,000 jobs, and revises full-year forecast from a profit to a loss of $1.1 billion. It will also spin off its TV business.

Sony has reached an agreement to sell its Vaio laptop business to an investment fund and spin off its TV business.
The Japanese electronics giant had been in talks with investment fund Japan Industrial Partners, according to earlier reports. That deal is now official, according to Sony.
Sony "has determined that concentrating its mobile product lineup on smartphones and tablets and transferring its PC business to a new company established by [Japan Industrial Partners] is the optimal solution," Sony said.
Sony, which plans to cut about 5,000 jobs as part of the sale, also revised its full year forecast to a loss of 110 billion yen ($1.1 billion) from a profit of 30 billion yen.
And the TV operations will be spun off into a separate unit.
"Sony has decided to split out the TV business and operate it as a wholly-owned subsidiary. The targeted timeframe for this transition is July 2014," the company said in a statement.

Here is the full Sony statement on the sale of its laptop business.

Following a comprehensive analysis of factors, including the drastic changes in the global PC industry, Sony's overall business portfolio and strategy, the need for continued support of Sony's valued VAIO customers, and future employment opportunities for personnel involved in the VAIO business, the Company has determined that concentrating its mobile product lineup on smartphones and tablets and transferring its PC business to a new company established by JIP is the optimal solution. Sony and JIP will now proceed with due diligence and negotiate detailed terms and conditions of the business transfer, targeting the conclusion of a definitive agreement by the end of March 2014. Following reevaluation of the product lineup, the new company is expected initially to concentrate on sales of consumer and corporate PCs in the Japanese market and seek to optimize its sales channels and scale of operations, while evaluating possible further geographic expansion.

As a part of the business transfer to JIP, Sony will cease planning, design and development of PC products. Manufacturing and sales will also be discontinued after the Spring 2014 lineup to be launched globally. Even after Sony withdraws from the PC market, Sony customers will continue to receive aftercare customer services. Approximately 250 to 300 Sony Corporation and Sony EMCS Corporation employees involved in PC operations, including planning, design, development, manufacturing and sales, are expected to be hired by the new company established by JIP. Sony will also explore opportunities for other employees to be transferred to other businesses within the Sony Group. For employees of Sony Corporation and Sony EMCS Corporation that are not hired by the new company or transferred within the Sony Group, Sony plans to also offer an early retirement support program to assist their reemployment outside of the Sony Group.


The company's money-losing PC business has a staff of about 1,000.
Sony established the Vaio brand in 1996 when Microsoft and Windows 95 ruled the world. At Sony's peak, it shipped close to 900,000 units a year. In 2013, it's expected to ship fewer than 600,000 units, according to IDC estimates.
This is happening against a backdrop of a shrinking PC market. Global PC shipments fell 10 percent in 2013, returning to 2009 levels, marking the worst decline ever, market researcher Gartner said in January.

10 Things to Know About Satya Nadella, Microsoft’s New CEO

Here are some key tidbits to mull over as he gets ready to take on what may be the single most challenging gig in the tech industry.

1. He was born in Hyderabad, India. And moved to the U.S. after graduating from Manipal University. That an immigrant will run this most American of companies is an inspiring story in itself.

2. He’s a longtime Microsoft insider. Nadella joined the company in 1992 from onetime Silicon Valley icon Sun Microsystems; he’s been a Microsoftie for well over half the company’s existence.

3. He’s an engineer. Unlike Steve Ballmer, who was an assistant product manager at Procter & Gamble before joining Microsoft in 1980, Nadella started out as a technologist. He holds a bachelor’s degree in electrical engineering from Manipal University and a master’s in computer science from the University of Wisconsin, Milwaukee.

4. But also a business type. In addition to his technology-oriented degrees, he has a master’s in business administration from the University of Chicago.

5. He’s been promoted again and again. Among his other high-level positions before he was appointed executive vice president for the cloud and enterprise group last year: president of the server and tools business, senior VP of R&D for the online-services division, VP of the business division, senior VP of search, portal and advertising-platform group, VP of development for the business-solutions group, and general manager of consumer and commerce.

6. He’s currently responsible for a huge, largely invisible part of Microsoft’s business. Among the products Nadella heads up: Windows Azure, Windows Server, SQL Server, System Center and the software-development tools that are Microsoft’s original business, dating all the way back to 1975. Consumers have no reason to pay attention to these areas, but they’re thriving — a big reason why Microsoft just posted robust quarterly results despite the PC industry’s struggles and Windows Phone’s failure, so far, to make much of a dent in Google’s Android and Apple’s iOS.

7. He’s played a major role in Microsoft’s transition to the cloud. The company’s very name references the era of software for microcomputers. But Nadella is leading its efforts to be just as good at Web-based services as it ever was at PC software — a battle at least as important to the company’s future as anything involving phones or tablets.

8. He does have some consumer background. Though Nadella’s career has skewed toward the business side of Microsoft, he’s also worked on some offerings used by folks in their personal lives, like the Bing search engine.

9. It’s not your imagination — he does have a low profile. Nadella is not exactly a hermit — Quartz’s Leo Mirani interviewed him about Microsoft’s future in December, when Nadella was already known to be a leading CEO candidate — but his focus on unglamorous-but-important products for business use means he shows up at public events less often than colleagues like Joe Belfiore of the Windows Phone team. (Presumably that will now change.) He also seems to have lost interest in Twitter.

10. We don’t know anything about his master plan. The fact that he’s a Microsoft longtimer might indicate he’s less likely to immediately attempt to impose massive change on the company than an outsider would have been. Or maybe not. And his background in business tools may or may not say anything about the company’s interest moving forward in consumer offerings like its Xbox gaming-and-entertainment platform. Stay tuned for more thoughts once Nadella starts to outline his vision for public consumption — and don’t be too surprised if that doesn’t happen immediately.