Sony is bidding goodbye to its long-cherished PC business - Vaio - due to poor performance. The company will now be focusing solely on its TV business, which it plans to turn it into a standalone entity by June 2014.
Sony has been in talks with an investment fund - Japan Industrial Partners - and now the deal has been confirmed, said the company in a press release. The deal will be finalised by the end of March, according to Nikkei. The deal could be close to 50 billion yen ($490 million), reported TechCrunch.
"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," said the company. However, it promised that its customers will get after sales service.
This deal will lead to job cuts, estimated to about 5000 around the world (1,500 in Japan, 3,500 overseas) by the end of this fiscal year.
Sony has said that it expects an annual loss of 110 billion yen (about $1.1 billion) for all of 2013, from a profit of 30 billion yen.
Further, the company has said it will turn its TV operations into a standalone 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," said the statement. By these measures the company wants to "enhance its TV business" profit structure and return the business to profitability during FY14.
The Vaio brand was established in 1996, and in 2013 the company shipped close to 600,000 units, according to IDC estimates.
Sony will not be the first Japanese company to exit the PC business. In 2011, NEC, which was a top domestic PC brand of Japan, sold its business to Lenovo, reported CNET.