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Panasonic will hand over parts of its TV operations to Skyworth, marking the end of an era as Japanese electronics groups transfer a business they dominated for decades to Chinese rivals that have outcompeted them.
China’s Skyworth will take over “sales, marketing and logistics” of Panasonic TVs in Europe and the US from April as part of a “comprehensive business partnership”, the Osaka-based company, which has been making televisions since the 1950s, said on Tuesday.
“The new business model change will leverage the power of Panasonic’s core technical excellence in audiovisual processing, quality and service standards with the global-scale economy of [Skyworth’s] manufacturing volume,” said Akira Toyoshima, chief executive of Panasonic Entertainment & Communication.
The news follows Sony’s agreement last month to cede control of its TV and home audio business, including the Bravia brand, to TCL through a joint venture in which the Chinese electronics manufacturer will hold a 51 per cent stake.
The deals mark a curtain closing on Japanese companies’ TV dominance. Sony, Panasonic and Sharp were the market leaders in the 1980s and 1990s before facing stiff competition from South Korea’s Samsung and LG and, later, Chinese competitors.
The east Asian rivals reshaped the market into a lower-margin business after the technological shift from cathode ray tube sets to liquid crystal displays.
Japanese manufacturers were forced to focus on premium products, reducing the global market share of Sony last year to less than 2 per cent, according to Counterpoint Research, putting pressure on scale and margins.
Loosening ties with their TV units is a key step for Sony and Panasonic to restructure away from low-profit or lossmaking areas.
Sony has been reshaping itself into an asset-light global entertainment company that distributes and creates intellectual property spanning gaming, anime, film and music.
“How long are we going to cry about Sony moving on from the Walkman and making TVs?” said Atul Goyal, equity analyst at Jefferies. “The question now is ‘does it make sense from a business standpoint’ . . . the deal with TCL works because it’s a proper spin-off, with no capital or capacity from the Sony side.”
Tokyo-based Sony is also phasing out shipments of its Blu-ray Disc recorders, a technology it pioneered, as it scales back in hardware that has become obsolete or commoditised.
By contrast, Panasonic is further behind in trying to overhaul its sprawling business, despite attempts to reinvent itself as an EV battery supplier to Tesla and a supply chain software provider.
The Osaka-based group said this month it expected 12,000 people to apply for early retirement after it pledged to cut 10,000 jobs in May. It is streamlining its portfolio, with the fate of the TV business being viewed as a key indicator of how deep the restructuring will go.
Unlike the sale of Toshiba’s TV unit to Hisense in 2017 or the Sony joint venture, the deal is not a sale or carve-out involving a capital tie-up but an operating partnership that hands purview of certain regions to the Chinese group and includes joint development of high-end OLED models.
Panasonic will continue to manage the TV business in its home market of Japan and said it would consider the appropriate business model for other markets.
For Panasonic, said Goyal, the deal’s value is “more of an open question as they don’t seem to be doing a full spin-off or giving up global rights — it’s more partial and limited”.
