Sony's Vaio line was the premium brand in personal computers for over a decade, known for its design, build quality and innovation. Vaio laptops were the choice of design-conscious professionals and creatives, and the brand commanded premium prices.
But the PC market became a brutal commodity business. Samsung, Lenovo, Dell and HP competed aggressively on price, and the shift toward smartphones and tablets shrank the overall PC market. Sony's engineering culture and premium positioning made it unable to compete on cost, and the Vaio division lost money for years.
In February 2014, Sony sold the Vaio brand to Japan Industrial Partners, a private equity firm, and exited the PC business entirely. The decision was part of CEO Kazuo Hirai's strategy to refocus Sony on imaging, gaming and entertainment. The case illustrated how a premium brand in a commodity market eventually faces a choice: compete on cost (and destroy the brand) or exit.
Sold the Vaio brand to Japan Industrial Partners in 2014, exiting PCs to preserve the brand rather than compete on cost and dilute it.
The PC market became a commodity business where Sony's premium positioning could not be sustained.
Sony's engineering culture and cost structure made it unable to compete with Lenovo, Dell and HP on price.
The shift toward smartphones and tablets shrank the PC market, reducing the opportunity.
Sony chose to exit rather than dilute the Vaio brand by competing on cost.
A premium brand in a commodity market faces an impossible choice: compete on cost and destroy the brand, or exit and preserve it. Sony chose exit — and it was right.
Vaio Corporation continues to make PCs in Japan as a much smaller company. Sony refocused on PlayStation, imaging sensors and entertainment, which became its most profitable businesses. The exit is now seen as a necessary strategic discipline.
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