An era is clearly over this week in the home electronics industry with Sony ceding control of its TV business and premium Bravia brand to Chinese rival TCL.
The news, however, should surprise no one. The Japanese electronics giant, once the king of the living room screen with its Trinitron tube TVs in the 1990s, hasn’t been competing well in this cut-throat, low-margin business for several years now.
The question now, with TCL controlling 51 per cent of the stake of a new joint venture that will use the Sony and Bravia brands for TVs made by the Chinese company, is whether they will still be just as good.
Despite falling behind Korean market leaders Samsung and LG in recent years, Sony still has a whole lot of brand goodwill built over decades.
And that’s not just with old consumers with memories of its tube TVs, but also younger ones familiar with the Playstation game consoles and Alpha cameras.
Sony will still have a substantial 49 per cent stake in the new company but the shots will be called by TCL, which will also be making the TVs.
That seems like a logical step, since TCL has the manufacturing base to push out new Sony Bravia models that can compete in both features and price.
After all, Sony has used display panels from third parties for a while now, so the “magic” has evolved into the tuning and software adjustments that make the hardware work better to produce better images.
Will Sony Bravia TVs be more competitive and remain premium products commanding higher prices? This depends on the direction TCL and Sony take in the coming years.
Sony, after all, joins a list of once-trailblazing Japanese TV manufacturers that have been sold or licenced in recent years to Chinese or Taiwanese companies – often to uncertain results.
Just take Sharp, one of the most important players behind LCD TVs in the 2000s. It was first licenced to China’s Hisense, then sold to Taiwan’s Foxconn (better known as the iPhone manufacturer) in a series of deals in the past decade.
Sharp still makes TVs today but it’s never regained its premium status in the early days of the flat-panel TV 20 years ago.
Another Japanese household name, Toshiba, also got its TV business sold to different buyers. Its TVs are now made by Hisense as well.
There are many more Japanese TV brands that have fallen on hard times. Pioneer, known for its high-end plasma TVs in the early 2000s, now only exists as a brand name for licensee TCL.
Panasonic, meanwhile, closed its factories in recent years and has its TVs made by TCL as well. Its high-end OLED TVs use LG’s display panels.
None of these brands today can command the premium that Korean pacesetters LG and Samsung do for the high-end TVs featuring OLED or mini LED displays.
If Sony were to succeed with its new Bravia venture with TCL, it has to go the way of IBM laptops, which were sold to China’s Lenovo back in 2004.
It was a bit of a shock back then for many diehard ThinkPad fans but Lenovo has managed to keep the premium ThinkPad branding as well as its design excellence over the years.
Today, Lenovo is the number one PC maker and its ThinkPad laptops, many of which are still designed in a legendary Yokohama lab, continue to command a premium and win over users. And that’s a tough market as well.
So, there is a path forward for premium Sony Bravia TVs. That, however, depends on Sony moving forward by drawing on TCL’s strengths and keeping its quality intact. Simply putting the Sony name on a TCL TV would be the surest way to destroy any remaining brand cachet.
