Thursday, February 16, 2012

Sony Selling Share of Joint LCD Panel Company to Samsung

Samsung and Sony S-LCDSony just announced on Monday that it plans on selling its entire stake in a single LCD manufacturing joint venture with Samsung for a measly $934 million. The two companies negotiated and signed a contract that will have Samsung turn the company, known as S-LCD, into a fully-owned subsidiary that will provide panels for Sony TVs, among other technologies. The manufacturing company was established by Sony and Samsung in April of 2004 with Sony owning a little less than 50%.

This acquisition comes at a point when Sony faces extreme losses in its television market and also faces lots of inquiries about whether or not it can revive the business that was once at the company's core. Sony announced back in November that it expected to lose more than $1 billion in the current fiscal year through April, even though it is currently recalculating that number in lieu of the recent sale.

According to a Sony press release, "This deal will allow Sony to acquire LCD panels from Samsung Electronics in a stable way based on market prices, without the responsibility or costs that come with operating a factory."

Like so many other companies, Sony has struggled to find profit in the LCD market, despite the fact that executives have claimed that they will not abandon the product. The newest plan by Sony calls for a shift to focus on profitability as opposed to the number of units sold while also shifting to acquiring panels from other manufacturers.

Sony has also announced that it is focused on a "four-screen strategy". This strategy is said to offer content and interconnect smartphones, tablets, laptops and other portable devices, as well as televisions. The company announced back in October that it would acquire Ericsson's 50% stake in their Sony Ericsson mobile phone partnership, which would allow the company to better integrate smartphones into its overall product lineup.

Source: PC World - Samsung to Buy Sony's Share of LCD Panel Joint Company for $934 Million

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