Sony to give up on sale of its battery unit: media
(Reuters) - Japan's Sony Corp has decided not to sell its lithium-ion battery unit, media reported on Sunday, in a gamble that it can turn the business around with a weak yen and growing demand for smart phone batteries.
Context & Ripple Effects
The report lands mid-portfolio-triage at Sony: within days of each other in late December 2013, Sony completed the $170 million sale of Gracenote to Tribune Co., confirmed its PlayStation 4 was outselling Nintendo's Wii U by wide margins, and saw the OLED TV production tie-up with Panasonic formally fail. Against that backdrop of shedding and retreating, media reports that Sony will keep its lithium-ion battery unit read as a deliberate counter-move rather than inertia.
Both the retention call and the turnaround logic — a weak yen cutting costs and growing smartphone battery demand lifting revenue — remain unconfirmed rumors attributed to media reports, so the claim rests on reporting rather than any Sony statement. It matters because batteries were widely assumed to be next on the block.
First-order effects
- Sony's lithium-ion battery unit stays on its own books, forcing management to fund a turnaround through internal cost cuts and the weaker yen instead of exiting at a negotiated price.
- Any prospective buyers who had circled the business lose the asset, and Sony's own smartphone and device lines continue to draw on an in-house cell supplier whose economics now have to stand on their merits.
Second-order effects
- Keeping batteries ties Sony's balance sheet to handset industry volumes, so every quarter of soft smartphone demand pressures the same cost base it just declined to sell out of.
- Rival Japanese electronics groups weighing similar component-business exits get a live test case of whether currency tailwinds and device demand can rescue a subscale unit — a data point that shapes their own hold-versus-sell decisions.
Third-order effects
- If the retained-battery gamble follows the pattern of Sony's other 2013 retreats — the failed Panasonic OLED collaboration, asset sales like Gracenote — the structural direction is a conglomerate progressively narrowing around entertainment and devices while components businesses either prove themselves or reappear on the sale list.
- More broadly, the episode captures the era's defining question for Japanese electronics makers: whether the weak yen is durable enough support to justify holding cyclical hardware businesses that consolidation logic says should be sold.
The trend: Japanese electronics conglomerates are running case-by-case hold-or-sell decisions on legacy component units, with the weak yen as the argument for patience and portfolio focus as the argument for exit.