A Case for Sony to Sell Off Its TV Operations

Bloomberg.com has weighed in on the question we asked last week, “Why is Sony still selling TV sets despite eight consecutive years of losses so great in its TV operations that it has caused the whole company to report losses in the last three years?” Sony said its TV operations are expected to lose a billion dollars this year despite having previously eliminated 30,000 jobs, closed or sold factories and moved manufacturing outside of Japan.

Bloomberg.com makes these points:

– Howard Stringer, the Sony chairman, has watched Sony’s market share decline 50% to $25 billion since he took over in 2005. During that time rival Samsung has become the world’s largest maker of TV sets, and its market value has increased about 75% to $118 billion.

– By selling off its TV operations, Sony shareholders could see a 70% increase in Sony’s share price. This rise would make the company worth $43 billion, according to calculations by Bloomberg.com.

– Sony is doing well with sales of its PlayStations and digital cameras but not well enough to offset losses in its TV operations. Its sales of smartphones, tablets and portable media players are negligible.

– Sony maintains that its TVs are one of its most important businesses, and CFO Masaru Kato has said the company has never considered getting out of making TV sets.

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