Key Points
- Sony and TCL signed an agreement to spin out Sony’s home entertainment business into a joint venture majority-owned by TCL.
- TCL will hold a 51 percent stake, with Sony retaining 49 percent and contributing its audio and image processing technology.
- The deal would shift operations of Sony’s TV business by 2027, pending regulatory and shareholder approvals.
Sony and Chinese electronics manufacturer TCL have signed a memorandum of understanding to form a joint venture to spin out Sony’s home entertainment business into a joint venture operated by both companies.
The move will see Sony’s high-end smart television business largely operated by TCL, which will hold a 51 percent stake in the new joint venture, with Sony retaining a non-controlling 49 percent stake in the business.
Both companies are hoping to formalize binding terms by March, with the new joint venture operating by April 2027, assuming Sony and TCL can secure all shareholder and regulatory approvals.
The new joint venture will continue to manufacture smart TV models under the Sony and Bravia brands for at least a little while longer. Both companies said the partnership will benefit from Sony’s audio and image processing technology and TCL’s global manufacturing and shipping presence.
Newer-model Sony TVs already use custom panels made by TCL, and that will continue once the joint venture is operational.
“We are pleased to have reached this agreement with TCL for a strategic partnership,” Kimio Maki, the Representative Director, President and CEO of Sony Corporation, said in a statement on Tuesday. “By combining both companies’ expertise, we aim to create new customer value in the home entertainment field, delivering even more captivating audio and visual experiences to customers worldwide.”
For Sony, the spin-out of its home entertainment business marks the end of a historic run that dates back to the 1950s, when Sony began selling its high-end Trinitron television sets in Japan. Those sets became the gold standard that other companies like RCA, GE and Zenith followed with their own premium models, but few could touch the image processing capabilities of a Sony TV, which became the coveted models in homes around the world.
The patent for Sony’s proprietary Trinitron technology expired in the mid-1990s, and the market was soon flooded with imitation-style cathode ray tube (CRT) TV sets. By then, Sony had already moved on to developing and shipping high-definition TV sets, and would soon become synonymous with manufacturing and selling premium flat-screen TV models.
Today, Sony’s TVs typically cost more than competing models sold by Samsung, LG, TCL and Hisense, with the company believing it can charge a higher price based on the perceived value of its brand and image processing technology. Newer Sony TVs are also among the few to support the NextGen TV standard across the board.
TCL is generally perceived as offering feature-packed, value smart TVs, with the company building its stateside business after signing a licensing deal with Roku to install its smart TV operating system in its low-cost models. When Roku began selling its own smart TV models, TCL quietly eased off its licensing agreement with the company, choosing to ship new sets with Android TV (Google TV) and Fire TV instead, though a few TCL Roku models continue to be sold.
TCL also develops premium smart TVs under the lesser-known FFalcon brand, an independently-operated subsidiary of the company. Less clear is whether FFalcon will continue shipping smart TVs once the joint venture with Sony is complete.
“We believe that this strategic partnership with Sony represents a unique opportunity to combine the strengths of Sony and TCL, creating a powerful platform for sustainable growth,” DU Juan, the Chairperson of TCL Electronics Holding, said on Tuesday. “Through strategic business complementarity, technology and know-how sharing, and operational integration, we expect to elevate our brand value, achieve greater scale and optimize the supply chain in order to deliver superior products and services to our customers.”
