In order to reduce its unprofitable TV business, Sony announced on Monday that it will sell its shares in a flat-screen TV joint venture with Samsung Electronics to reduce its production capacity when outsourcing has become a trend for manufacturers.
The drop in TV prices has brought difficulties to most manufacturers and sellers. Sony Corp., which produces Bravia LCD TVs, said in a statement that it will sell 1.08 trillion won (or 935 million U.S. dollars) of its 50% stake in the joint venture S-LCD to Samsung.
The joint venture company was established in April 2004 in South Korea's Yui. Sony's exit will turn it toward cheaper outsourcing options and help it recover from the trapped TV business. Other LCD screens produced by Sony are co-produced with Sharp and Sony owns 7% of the shares.
The fierce competition in TV and related industries is compressing the profit margins of television manufacturers, especially Sony. Analysts have been accusing the production cost of being too high. The ever-strength yen is also affecting Sony's profits. Last month, Sony Corp. warned that it will lose money for the fourth consecutive year. Sony lost more than trillion yen in the television business. Sony said that due to its withdrawal from the joint venture with Samsung, it will reduce the loss of US$845 million in the last three months of 2011.
The drop in TV prices has brought difficulties to most manufacturers and sellers. Sony Corp., which produces Bravia LCD TVs, said in a statement that it will sell 1.08 trillion won (or 935 million U.S. dollars) of its 50% stake in the joint venture S-LCD to Samsung.
The joint venture company was established in April 2004 in South Korea's Yui. Sony's exit will turn it toward cheaper outsourcing options and help it recover from the trapped TV business. Other LCD screens produced by Sony are co-produced with Sharp and Sony owns 7% of the shares.
The fierce competition in TV and related industries is compressing the profit margins of television manufacturers, especially Sony. Analysts have been accusing the production cost of being too high. The ever-strength yen is also affecting Sony's profits. Last month, Sony Corp. warned that it will lose money for the fourth consecutive year. Sony lost more than trillion yen in the television business. Sony said that due to its withdrawal from the joint venture with Samsung, it will reduce the loss of US$845 million in the last three months of 2011.
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