The maker of Bravia TVs cut its sales and profit estimates last week, citing sluggish sales of TVs in the US and Europe.
Tokyo-based Sony, reeling from three consecutive years of companywide losses, also slashed its full-year TV sales target by 19 per cent to 22 million units.
Sony also announced at the time that Yoshihisa Ishida, president of the home-entertainment unit that makes TVs, would be replaced by Masashi Imamura, president of the personal imaging group that produces cameras. Ishida will become a deputy chief executive at Sony Ericsson Mobile Communications.
In the past two years, Sony has sold three factories, reducing its number of TV plants worldwide to four, as part of the company's efforts to reduce costs.
Sony agreed last year to sell 90 per cent of a TV factory in Nitra, Slovakia, to Foxconn's Hon Hai Precision Industry, after disposing of 90 per cent of its largest North American TV-making assets to Taipei-based Hon Hai. Sony also agreed to sell a TV facility in Barcelona in September.
Once worth more than US$100 billion, Sony has lost half its market value since Stringer became its first non-Japanese chief executive officer in 2005. The company that invented the Trinitron cathode-ray tube TV in the 1960s is now valued at about US$25 billion ($29 billion), less than a quarter the size of Samsung.
Sony may no longer rely on its brand for an edge. Since Samsung passed Sony in terms of brand value in 2005, the Korean company has extended its lead, ranking 19th in Interbrand's latest annual survey of global brands, or 15 places above Sony.
Clinging to the television business may be costing shareholders. While analysts say Sony shares may climb as sales of its PlayStation game consoles and Cybershot digital cameras bolster profit this year, stripping out losses at the TV business from the rest of the company would boost its equity to US$43 billion, according to data compiled by Bloomberg.
By selling the TV division, Sony would exit a business that is forecast to lose almost US$1 billion this year as consumers unwilling to pay for its Bravia flat-screen TVs turn to cheaper brands.
The TV unit had 1.2 trillion ($17 billion) in sales last year, making it the biggest source of Sony's revenue, data compiled by Bloomberg show.
Shiro Kambe, Sony's chief spokesman in Tokyo, said yesterday the company had never considered walking away from the TV business because of its importance to the company.
The company lagged behind Samsung and Seoul-based LG in the global TV market last year, with 12.4 per cent of sales, according to DisplaySearch. Sony's share slipped to 11.4 per cent in the first quarter.
"The reorganisation plan should be big enough to surprise the market," said Keita Wakabayashi, an analyst at Mito Securities. "It may not be easy for Sony to come up with something very new to investors."
- Bloomberg