Sony is throwing in the towel with its VAIO PC and e-book reader businesses, a move that could greatly increase the company's profitability. Sony plans to focus on mobile devices, which include the Xperia smartphone lineup and the company's tablets.
Sony announced that it would sell off its VAIO PC business first, citing declining PC sales as the reason behind the move. By selling the VAIO PC business, Sony has cut off a lot of dead weight. The company hopes that the sale will benefit Sony in the long run.
Sony sold the VAIO business to Japan Industrial Partners. In a press release, the company said that it "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.
The company will lay off 5,000 workers overall and forecast a 110 billion yen ($1.1 billion) loss from a profit of 30 billion yen for the fiscal year. Around 1,000 people who worked for the VAIO PC business will now be out of a job.
"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," the company said.
In addition, Sony's TV business will now become a separate unit apart from Sony as a whole.
"Sony has decided to split out the TV business and operate it as a wholly-owned subsidiary. The targeted time frame for this transition is July 2014," the press release from Sony said.
Now, Sony announced that its struggling e-book business will also come to an end. Sony's e-book readers will now go to Kobo. All user accounts, books and so on will now be available from Kobo, not Sony. Sony was forced to relinquish its e-book reader plans in face of growing competition from tablets. Amazon's Kindle e-reader was always more popular than Sony's, so the sale comes as no big surprise.
Sony's e-book store will close next month in the United States and Canada, but all of the books purchased by Sony e-reader users will simply be transferred to a new Kobo account. Since Kobo works on both iOS and Android devices, Sony's got its loyal customers covered.
Abandoning all of these businesses in one shot may seem crazy, but it proves that Sony means business when it comes to competing aggressively in the mobile tech market. Sony is cutting off dead limbs so that the core of its business remains intact and can continue to grow. Although Sony's smartphones may not be big in the United States, they are gaining popularity around the world.
Now that Sony's load has lightened considerably, it can focus on making money in the mobile device market and strengthening PlayStation's hold on the gaming world. If all goes well, Sony may very well benefit from this big sale.