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UPDATE 2-Sony rules out quitting TV business; to keep Vita price
August 4, 2011 / 9:45 AM / 6 years ago

UPDATE 2-Sony rules out quitting TV business; to keep Vita price

* Sees televisions as core business

* Does not plan to cut price of Playstation Vita

* Seeks to pull together plans to overhaul TV division (Adds details, background)

By Reiji Murai

TOKYO, Aug 4 (Reuters) - Sony is not planning to dump its television business, which is heading for its eighth straight year of losses, even as it looks to pull together plans this month to overhaul the division.

The electronics and entertainment conglomerate will consider new partnerships as part of the review, second-in-command Kazuo Hirai told a group of reporters on Thursday.

“Televisions are a core business for Sony and it would be unthinkable for us to shrink that business,” executive deputy president Hirai said at the company’s Tokyo head office.

Sony, which sells products ranging from PlayStation game consoles to life insurance, is struggling to compete with Samsung Electronics and other lower-cost Asian rivals. Rival Panasonic Corp has also warned of weak TV sales, especially in the United States and Europe.

Sony has already sold off TV factories in Spain, Slovakia and Mexico in the past few years and outsources more than half of production to companies including Hon Hai Precision Industry. It retains four TV plants of its own, in Japan, Brazil, China and Malaysia.

“They have done an awful lot already, and this was the time when that effort was supposed to come to fruition,” said Shiro Mikoshiba, an analyst at Nomura Securities. “It’s honestly hard to know what else they could do.”

In games, Hirai said Sony would not be forced to cut the price of its new handheld gadget, PlayStation Vita, after the flop of Nintendo’s 3DS forced Nintendo to slash its prices.

“There’s no need to lower the price, just because someone else that happens to be in the videogame business decided that they were going to,” Hirai said, according to a Sony spokesman who confirmed the content of a separate group interview not attended by Reuters.

Former games division chief Hirai took the helm of Sony’s consumer businesses in April and is seen as the most likely candidate to succeed British-born Howard Stringer as chief executive.

But the 50-year-old faces the challenge of steering a once iconic technology company now outmanoeuvred in tablets and smartphones by Apple Inc .

Sony has said it would pull together plans to overhaul its TV business this month, and last week it cut its annual TV sales forecast while warning that losses on TVs could widen this year.

Hirai said it was too soon to tell when the TV unit would be profitable, though the company aims to turn it around as soon as possible.

Asked about the partnership with Samsung in LCD panels, Hirai said: “We are absolutely not thinking of abolishing the joint venture, and it’s not something that would be easy to do.”

Speculation has swirled that Sony could look to buying Ericsson out of their mobile phone joint venture, but Hirai said only that there were “various discussions” about the partnership.

The PS Vita will go on sale in Japan by the end of the year and in North America and Europe early next year, Hirai said, missing the key pre-Christmas shopping season.

But Nomura’s Mikoshiba said neither the price nor the timing of the launch were likely to be major problems.

“Sony basically sells to core gamers and they will spend any amount on games,” he said. (Additional reporting by Isabel Reynolds and Sinead Cruise; Editing by Anshuman Daga and Edmund Klamann)

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