EXCLUSIVE: Sony Set To Cut Partnership Deal To Offload TV Business

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Senior executives at Sony who are struggling to work out what to do with their loss making TV operation have considered a joint operation similar to what European TV maker Philips did two years ago a Sony source has claimed.

TPV Technology took over Royal Philips Electronics NV’s television operation in 2012 since then the Company has grown market share including in Australia where the brand is being sold via Harvey Norman via a distribution relationship with Tempo.

ChannelNews has been told that the Japanese TV maker who has not made a profit selling flat panel TV’s for more than six years has already held discussions with potential partners. 

Among the potential partners are Foxconn and Chimei Innolux (CMI).

Sources at Sony Japan said “Sony will offload their TV division it is only a matter of time”. 

“At IFA recently Sony’s stand featured more digital cameras and lenses than it did TV’s, this was in stark contrast to what they had at their CES stand” said another source. 

Another Sony head office source who use to work for Sony in Australia said “Sony has still not got over the fact that they do not dominate anymore in the TV market they still think that they are back in the days of the Sony Trinitron TV. Just because they do well in Japan does not mean that the rest of the world will take the same view of a Sony product.

Six months ago Sony said that they intended to spin off its TV business and concentrate on high quality 4K screens. In Australia this strategy went pear shaped when despite a multimillion dollar investment in the 2014 Soccer World Cup in Brazil sales of their TV’s fell including their overpriced 4K TV models. 

Without the facility to produce its own LCD panels Sony has found itself forced to buy in components from the likes of Samsung and Sharp. 

Sourcing panels from third parties meant there was very little control over the main component of the product line and therefore picture quality.

Forbes Magazine’s said earlier this year that as a result of the Company having to buy in panels from other manufacturers it had seriously impacted on costs and profitability just at the time when it needed to be really competitive to gain market share. 

In 2012 Sony realised it needed to have a complete rethink.

 It decided to go back to basics and concentrate on developing the highest possible picture quality. The secret weapon they thought they had was their Sony X-Reality Pro engine that offered better noise reduction and a perceived boost in picture quality.

 Sony also developed its range of new Triluminos Displays that the company claimed offers more natural colours and a much wider colour gamut on screen. The only problem was that consumers failed to buy their sales pitch resulting in poor TV sales. 

Now the Company who are fresh out of ideas as to how to turn their TV business around is looking to partner in an effort to cut the financial bleeding that is hurting the Company.
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