Toshiba Corp. will sell its sluggish personal computer business to Sharp Corp. for around 4 billion yen, Toshiba announced Tuesday.
Having recovered from a business crisis, Toshiba has now narrowed down its growth pillars to energy and other businesses and had been considering selling its PC business, which has been struggling in competition with rival Chinese and Taiwan makers.
Toshiba plans to sell a 80.1 percent stake in its Tokyo-based subsidiary Toshiba Client Solutions Co. -- which produces the Dynabook line -- to Sharp in October. The Dynabook brand is expected to continue.
Sharp, in the past, had produced the notebook-size computer Mebius but withdrew from the business in 2010 due to fierce competition that caused the profitability of its PC business to deteriorate.
In 1985, Toshiba released a laptop computer which is viewed as the model for present-day notebook computers. And Toshiba's notebook PCs claimed the largest market share in the world in the 1990s.
However, the emergence of foreign rivals, including Asian firms, that excel at price wars drove Toshiba into a corner. The Japanese maker had carried out structural reforms, such as closing down its Japan factories to consolidate its production bases in China, only to fail to win orders. Toshiba posted an operating loss of 9.6 billion yen in fiscal 2017.
Toshiba's business performance deteriorated due to the massive loss, leading the company to reassess the future profitability of its PC business.
Sharp, for its part, has been strengthening its business aimed at corporate clients, such as manufacturing electronic blackboards to be used for business meetings. It aims to boost synergistic effects by combining those products with personal computers. After a possible acquisition of the PC business from Toshiba, Sharp is expected to take over the high-profile Dynabook brand.
Taiwan-based Hon Hai Precision Industry Co., Sharp's parent company, is a leading commissioned manufacturing firm that undertakes production of computers for companies that do not have their own factories.
Hon Hai's ample procurement network for related parts also seemed to be an incentive for Sharp to judge it would be able to make a profit swiftly by improving production efficiency.
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