Early 2014 saw Japanese electronics conglomerate Sony Corp. (TYO:6758) enter crisis mode. In an effort to stitch up is bleeding balance sheet, the company committed to committed to cuts of JP¥70B (~$580M USD) in spending and layoffs of 5,000 employees globally.
It also spun off the VAIO brand of personal computers and sold a 95 percent stake in the new firm to the Tokyo, Japan-based private equity firm Japan Industrial Partners Inc. (JIP). Worth an estimated JP¥40-50B (~$330-$410M USD). The deal gave JIP a 95 percent stake in the spun-off unit, with Sony retaining a 5 percent stake. The aggressive tactic allowed Sony to focus on moving its Xperia-branded smartphone, tablet, and wearable (e.g. smartwatch) offerings toward profitability.
Now Sony has an interesting new headache to deal with — Vaio is entering the smartphone space, looking to compete with its former firm.
The working title of the company’s first smartphone is “VAIO Phone” (model VA-10J). The VAIO Phone won’t target the premium crowd. Rather its spec is designed to appeal to budget buyers. The phone first showed up on a B-Mobile webpage, a site of Japanese mobile device distributor Japan Communication Inc. (TYO:9424).
Here’s the spec:
It is unknown whether the budget device will be brought outside the Asian market to other regions like North America and Europe.
Seeing its former brand show signs of expansion must be a bit bitter for Sony whose Xperia smartphones continue to lose money with no end in sight.
VAIO is also toying with tablets powered by Google Inc.’s (GOOG) Android and Microsoft Corp.’s (MSFT) Windows operating systems. Following its launch of the hybrid VAIO Tap 11 (a design that eerily mirrored Microsoft’s Surface) and Flip 13/15 (which featured a unique hinge mechanism) in late 2013, Vaio aired a new tablet dubbed “Vaio Prototype” last October. Last month that device finally was made official [PDF] as the VAIO Z Canvas — effectively the inheritor of the Tap 11 design. VAIO also announced a Flip 13 successor, dubbed the VAIO Z.
The Vaio Z features a rather fancy hinge mechanism, introduced with the Flip 13/15.
The VAIO brand was born in 1996. It’s actually an acronym for “Video Audio Integrated Operation.” The acronym in 2008 was freshened to stand for “Visual Audio Intelligent Organizer.” In the 1990s the brand gained recognition for novel PCs, such as the PCG-505, a precocious notebook with a magnesium body that resembles today’s ultrabooks. Also noteworthy was its first desktop, the 1997 PCV-90 which baked a 3D graphical user interface on top of Windows 95.
The Sony VAIO PCV-90 [Image Source: The Verge]
From 1996 to 2005, VAIO was a pioner in the thin laptop movement with its “SuperSlim” products. Apple, Inc. (AAPL) would later cite Sony’s designs as inspiration for its MacBook and iOS products. The Verge editor Tom Warren did a nice photo essay last February on the history of VAIO’s PCs.
Armed with stylish form factors, VAIO has long had a premium brand image and market to affluent buyers with a variety of higher end PC models.
In some regards the Sony split may help VAIO. After all, one of the biggest backlashes it faced was over concerns about Sony “bloatware” — some of which was akin to malware in practice — that was loaded onto its laptop models. At one point it even tried to charge customers a fee for cleansing the bloatware. While Sony has increasingly scaled back this egregious behavior in recent years, its track record remains a work in progress. Now VAIO is free to define its own legacy.
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