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Sony ditches PC brand

07 Feb 2014

Reports from Japan say that the tech giant does not see the viability of supporting it's Vaio brand any longer.

Sony's decision to leave the PC making business means that after 17 years, the Vaio brand will most likely disappear before the end of 2014.

The decision highlights a problem that has begun to afflict makers of Windows PCs, as the market for PCs shrinks, profits are quickly becoming losses.

Ranjit Atwal, devices analyst at research firm Gartner, says there is a shakeout coming. The PC market is dominated by five big companies – China's Lenovo, the American HP and Dell firms, and Taiwan's Acer and Asus. Together they ship 60% of the PCs sold globally a year. Apple has just over 5% of the market. That leaves about a third of the market for the smaller players, and far less of the profits.

As the PC market has contracted over the past two years, from a peak of 361m in 2011 to 315m last year, it has become more difficult for smaller manufacturers to make a profit.
Atwal ranks Sony within the "bottom four" of PC manufacturers and combined with the other three, they had about 12% of the market last year.

"They've lost market share, and the market they're in has shrunk as well. Scale is everything in this market. If you haven't got economies of scale then the underlying costs of getting to market, retail and so on, is too great to be profitable," he said.

Sony is instead turning to smartphones and tablets, which are growing markets.

"Sony will not be the last to say goodbye to PC hardware," says Ben Bajarin, an analyst with Creative Strategies, in California. "Those who survive will reap the rewards."

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