Sony said quitting Samsung S-LCD joint venture
updated 07:45 am EDT, Sun October 30, 2011
Sony reducing its exposure in TVs for smartphones?
Sony is said to be quitting its joint venture with Samsung for the development of LCDs. According to Reuters, a rethink of Sony’s loss-making television business prompted the decision in a move that is designed to help the company cut costs. The joint venture is a 50-50 arrangement, with Sony now looking to sell its stake in the development of S-LCD panels to Samsung.
One insider, however, believes that the rumors are possibly a distortion of the negotiations currently taking place between the partners. Sony, the insider claims, is in negotiations with Samsung over its returns from the deal. Both company’s have so far declined to offer comment on the matter.
However, industry sources believe that due to the oversupply of LCDs in the global market, Sony will be more inclined to get out of the development of the products. Instead, a wiser strategy for the company would be to outsource its LCD panel needs.
The news follows an announcement by Sony earlier in the week that is buying out 50 percent stake owned by Ericsson in their joint mobile phone venture. Sony has begun taking a more serious approach to its smartphone business and believes that more room for growth is in that segment, which remains a profit-making arm of the company.
As part of its announcement in acquiring Ericsson, Sony added that it was dropping ‘dumb’ phones, or ‘feature’ phones, in order to concentrate on higher margin smartphones. Reducing its exposure to LCDs, while bolstering its mobile operations would be a plausible move by the company should the rumors prove to be founded.
