A bombshell has dropped on the global consumer electronics market with the announcement a few hours ago that TCL will take over Sony's TV and home audio businesses starting April 1, 2027. Sony is facing the consequences of an increasingly fierce audio-video market, driven by Chinese players, in which it is finding it increasingly difficult to gain a foothold and therefore achieve profitability.
Subject to regulatory approval and the signing of a definitive agreement between the Japanese firm Sony and the Chinese firm TCL, Bravia TVs and the Japanese firm's home audio equipment will be under the control of a new company created jointly by Sony and TCL, with TCL holding a majority stake of 51% (compared to Sony's logical 49%). This summarizes the main points of today's announcement from Sony on its Japanese website.
The official Sony press release in France££££
At the same time, or almost, Sony France's public relations agency specified in the language of Molière:
• Sony and TCL have agreed to continue their discussions and the examination of a strategic partnership in the field of Home Entertainment
• The two companies have signed a memorandum of understanding to confirm their intention to create a joint venture that would take over Sony's Home Entertainment business, with TCL holding 51% of the capital and Sony 49%. This joint venture would operate globally and cover the entire value chain, from product development and design to manufacturing, marketing, logistics, and customer service, for products including televisions and home audio equipment; • Sony and TCL will continue discussions with a view to concluding definitive and legally binding agreements by the end of March 2026. Subject to the execution of these definitive agreements, receipt of necessary regulatory approvals, and fulfillment of other customary conditions, the new entity is expected to commence operations in April 2027; • The new company plans to grow its business by leveraging Sony's high-quality image and sound technologies, developed over the years, as well as its brand value and operational expertise, particularly in supply chain management, while taking advantage of TCL's advanced display technologies, global presence, manufacturing capacity, and end-to-end cost efficiency. and its advantages related to a vertically integrated supply chain; • The new entity's products are expected to be marketed under the globally recognized Sony and Bravia brand names, with the ambition of creating new value for customers through these branded products, such as televisions and home audio equipment; • Additional information beyond that presented in this announcement will be communicated in the event of significant developments or changes, including upon the signing of definitive agreements; Kimio Maki, President and CEO of Sony Corporation, said: “We are delighted to have reached an agreement in principle with TCL regarding this strategic partnership. By combining the expertise of our two companies, we aim to create added value for our customers in the home entertainment sector and offer them an even more captivating viewing experience around the world.”
Sony TVs in TCL's hands, what about OLED? After reading the press release, several questions arise. The first concerns the future of OLED TV series within the Sony range. What about their presence from 2027 onwards with the joint venture effectively controlled by TCL, which might not serve the interests of Samsung Display and LG Display through Sony's broadcasters? Perhaps by then, TCL will have in-house OLED panel manufacturing capabilities, for example, those intended for the IT sector and presented at the last CES in Las Vegas… However, their performance is far from matching that of the QD OLED and WOLED models from Samsung Display and LG Display, respectively (but this could change for the better, even if 2027 seems too soon to materialize such technological advancements on these screens that they could compete with Samsung Display and LG Display). Not to mention that TCL might want to take advantage of this joint venture to further promote its Mini LED LCD technology, which it created. Sony home audio in TCL's hands: what equipment is involved, and what about OLED? What about home audio equipment? While it's reasonable to assume that Sony-branded soundbars, perfect companions to Sony screens, would fall under the purview of the aforementioned joint venture, will the same be true for other Sony audio equipment: home theater systems, hi-fi systems, headphones, headphone amplifiers, Bluetooth speakers, audio players (including the Walkman), turntables, party speakers, etc.? It's difficult to imagine, on the one hand, that all this equipment will eventually be included in the scope of the future joint venture, and on the other hand, difficult to imagine that the marketing of some Sony audio products will be handled by Sony France while others will be managed by this joint venture… As you can see, while the Sony press release came as a surprise, many questions quickly arose. This agreement reveals a profound reshuffling of the cards in the electronics and home entertainment (EGP) sector. While Korean companies are still resisting the onslaught of Chinese firms (Samsung performing better than LG), Japanese companies are giving way and being swept aside one by one. The final question remains: will Sony maintain its presence in all or part of the consumer electronics market's audio-video segment? Admittedly, we'll have to wait a little longer for the answers, but many of us are eagerly awaiting them…
