Sony Reportedly Enters Discussions with Lenovo to Save Vaio PC Business
Japan’s Sony Corp has reportedly entered into discussions for a potential joint venture with China’s Lenovo Group. According to a report by Japanese major broadcast firm NHK aired yesterday, the possible alliance will be aimed at saving Sony’s troubled PC business, Vaio.
However, the Japanese electronics manufacturer quickly dismissed that report. It described the report as ‘inaccurate.’ But at the same time, the company admitted that it is currently exploring various options on what to do with the underperforming PC business.
But some analysts observe that Sony did not confirm or deny any discussion with Lenovo. They think that a small detail of the report may seem technically inaccurate, but it is also possible that such negotiations really exist between the two companies.
Dismal expectations ahead of results week
Revising the strategy for product and manufacturing of Vaio PCs is part of Sony’s plans. This is quite practical as the company continues to face a slump especially within its troubled PC business. It usually blames this problem to the rising popularity of tablets and smartphones.
Sony has already warned that its PC unit would be reporting a slump. It has always refused to disclose any figure. The company is set to post its results next week. This early, the electronics manufacturer has already been conditioning the mindset of its shareholders to not expect favorable numbers when figures are released soon.
It definitely does not help Sony that Moody’s Investors Service recently downgraded its rating on the company to junk status. The ratings agency underlined Sony’s troubled TV and PC businesses. It also highlighted the perceived pressure on the company’s core consumer electronics division.
Lenovo’s aggressive growth strategy
Meanwhile, Lenovo seems getting more aggressive in growing and diversifying its current portfolio. The Chinese firm is estimated to earn up to 80% of its regular revenue from PCS. At the same time, Lenovo is also active on pursuing initiatives to get into a number of promising markets.
Just last week, Lenovo braced the headlines when it announced that it has agreed to acquire Motorola Mobility from Google Inc. The PC maker is estimated to shoulder about $2.91 billion for that transaction. The acquisition is now the fourth biggest buyout by any Chinese or Hong Kong-based company ever. Some observers think that Lenovo must be contemplating about competing with Apple Inc and Samsung Electronics soon.