People are watching less television than they used to. Streaming and smartphones have become a replacement, especially for younger viewers. It isn’t hard to see why traditional leaders such as Sony, which is spinning out its TV and home audio operations into a joint venture with China’s TCL Electronics, are retreating. The real question is why Chinese manufacturers are buying in.
What was once a lucrative business, dominated by Japanese and Korean groups for decades, has since the mid-2000s turned into a low-margin utility industry as LCD panels became standardised. Even Samsung, the world’s largest TV maker, reported operating losses in its visual display division in the third quarter, a warning sign for a market that has been reliant on volume to offset weak pricing.
That pressure helps explain Sony’s move to give up majority control of its TV business to TCL, which will hold a 51 per cent stake and operational control while Sony retains its brand.