Sony and TCL are entering into a joint venture that will effectively see TCL take majority control of Sony’s television and home audio business, including the BRAVIA TV lineup.
For decades, Sony, and the Sony BRAVIA brand in particular, has been the watchword for quality domestic televisions. However, that hegemony, and that of all the other giant Japanese TV manufacturers, has come under increasing threat in recent years.
The industry is changing. Several Japanese brands, including Toshiba, Pioneer and Sharp, have already either exited or significantly reduced their TV operations. South Korean firms including LG and Samsung now dominate the premium end of the market, while there is increasing competition in the budget and mid-range segments from Chinese manufacturers such as TCL and Hisense.
No one is finding it easy to make money. Margins are tight, replacement cycles have lengthened, demand has been undercut by screens on everything from phones to fridges, so seeing Sony cool on the sector as market share declines is not exactly surprising.
Sony and TCL have signed a memorandum of understanding and a basic agreement to establish a new joint venture company replacing Sony's home entertainment business, which includes TVs and home audio equipment.
Under the proposed structure, TCL will hold a 51% stake, while Sony will retain 49%. The new company will operate globally across the full product lifecycle, from product development and design through manufacturing, sales, logistics, and customer support.
To the consumer, little will change. The Sony and the BRAVIA brands are both staying very much intact. However, it looks like the future televisions themselves will be based on TCL’s display technology, with the companies pointing to a focus on larger screen sizes, higher-resolution panels, and increasingly sophisticated smart TV features. The joint venture is intended to combine Sony’s picture and sound technologies, brand strength, and operational expertise with TCL’s scale, vertically integrated supply chain, and cost competitiveness in display manufacturing.
It is, of course, not the first time Sony has exited a market. Blu-ray media, the VAIO PC line and recent others signal a change away from lower-margin consumer electronics and into other fields, specifically higher-margin intellectual property businesses spanning film, television, gaming, and anime.
This, though, is less an exit and more a managed retreat. The press release about the deal talks optimistically about the global large-screen television market continuing to grow. So, while it might now just be a junior partner in the new venture, it still has access to 49% of the revenue it can bring in. And, if TCL can get its long marketing levers properly set under the Sony brands, that could still represent some very decent income, market pressures notwithstanding.
The target date for signing is March this year with operations commencing in April 2027.