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Sony streamlining business, stop partnership with Samsung

Sony are selling their stake in the panel partnership with Samsung Electronics, cutting their production capacity to help streamline their organisation. They are not making great profits from this section of their business model.

Sony Bravia televisions are regarded as some of the finest in the industry, but Sony have said that they are selling a stake of almost 50 percent in S-LCD to Samsung, for around £600 million ($935 million).

The NYTimes say “Sony’s exit from the joint venture, which was set up in Tangjeong, South Korea, in April 2004, will let it switch to less-expensive outsourcing options that may help it to resuscitate its struggling television business. The only other LCD panels Sony manufactures are through its joint venture with Sharp, in which Sony owns a 7 percent stake.”

Sony have said that they will be losing money for the fourth consecutive year which ends in March 2012. Their TV division alone accounts for billions of yen losses every year. They say that they aim to lose $845 million for the first three months in 2011 alone. The partnership cancellation with Samsung should save them 50 billion yen a year.

They said in their statement that they “aim to secure a flexible and steady supply of LCD panels from Samsung, based on market prices and without the responsibility and costs of operating a manufacturing facility.”

Samsung earned $14 billion on their sales of more than $134 billion. By comparison Sony lost $3 billion on sales of $92 billion.

Kitguru says: Sony set to tighten up their infrastructure to lower overheads and expenditure in 2012.

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