Sony ($SNE) and Olympus ($OCPNY) will partner to develop and make new endoscopes and other medical devices, the companies said today.
Both disclosed the business alliance today, a deal that evolves out of Sony's decision to finally to invest $645 million into the beleaguered Japanese maker of endoscopes and cameras. A joint announcement on Sept. 28 from Sony and Olympus publicizes both the partnership and investment agreement.
The possibilities here are enormous, of course. Sony is a global maker and purveyor of all kinds of consumer technology. But as those sectors stagnate and struggle, the Japanese conglomerate is looking to grow its medical device and technology business lines. Olympus, the world's largest maker of endoscopes, is still facing financial fallout from a massive accounting scandal that rocked the company and became public late last year.
And as The New York Times, Bloomberg, The Wall Street Journal, AFP and many others are reporting, Sony's 11.5% stake in Olympus will help create a potentially new competitive element in the device industry. Both companies disclosed in their announcement that the idea here is to combine Olympus' lens and optical technologies, its brand and R&D prowess with Sony's digital imaging technologies and come up with new endoscopes and other medical devices that could be potential game changers.
Not everyone is convinced, however, that the deal is all that special. The Wall Street Journal ran a headline terming the alliance as "The Anemic Duo." As the article explains, both companies continue to deal with massive losses, Olympus because of its accounting scandal problems and Sony because of a sluggish games division and a TV business that has lost money for years. A new partnership between two companies tainted by massive losses and scandal won't necessarily address those problems, the story correctly notes.
Olympus spent months courting a variety of investment suitors, including Fujifilm and Terumo. And now Sony can grow its medical device business in direct competition with archrival Samsung, which is pursuing a similar business strategy.