At long last, Sony and Olympus launch medical device joint venture
After indefinitely suspending their plans over a Chinese regulatory snag, Sony ($SNE) and Olympus ($OCPNY) are finally kicking off their long-planned medical device joint venture, planning to sell endoscopes and imaging technologies around the world.
The pair is calling its venture Sony Olympus Medical Solutions--replete with a new logo and all--and Sony holds a 51% stake in the company. While the two Japanese giants are best known for their consumer electronics, they're confident that matching Sony's R&D expertise in digital imaging with Olympus' wide footprint in optics manufacturing will create a competitive force in the medical device market.
Sony and Olympus announced their plans back in September, but repeated roadblocks--most recently a delayed approval in China--led them to postpone its launch time and again until now.
And it couldn't come sooner for the two struggling tech companies. Sony is grappling with bearish markets for its TVs and gaming systems, while Olympus is still crawling out of a sweeping, decade-long accounting scandal made public in 2011. Each is counting on a dive into the medical device world to drive revenue growth.
"We will channel our cutting-edge imaging technologies, resources and assets into the new venture," Sony CEO Kazuo Hirai said in a statement. "By integrating these with Olympus' wealth of knowledge and expertise in medical technologies and business, I am confident the new company will bring innovation to the medical industry and achieve great success."
But not everyone is so ecstatic. When the deal was first announced, The Wall Street Journal dubbed Sony and Olympus "the anemic duo," pointing to their combined track record of racking up losses and botching launches of new technologies. Working in their favor, however, is Olympus' market dominance in endoscopes and enough brand recognition and marketing heft to ease entry into new spaces.
- read the joint announcement