Sony Corp. recently saw the coronation of Kazuo Hirai as CEO, and he promises to reform the company. However, with projected losses of $6.4 billion this year, the company is in severe trouble and its stock is now a fraction of Apple’s and Samsung’s.
“It’s almost game over at Sony,” said Yoshiaki Sakito, a former Sony executive who has worked for Walt Disney, Bain & Company, Apple and a start-up focused on innovation training. “I don’t see how Sony’s going to bounce back now.”
The company was unable to corner the digital music player market despite having resources to do so and has been unable to successfully counter Apple’s iTunes. Meanwhile, lower-cost manufacturers from South Korea, China and elsewhere have commoditized other products like televisions.
“At this point, Sony just needs some strategy, any strategy, because that is better than no strategy at all,” said Sea-Jin Chang, chairman for business policy at the National University of Singapore and author of Sony vs. Samsung: The Inside Story of the Electronics Giants’ Battle for Global Supremacy.
There’s also the issue with the PS3, which came out after the Xbox 360 and cost significantly more than the Wii to make. The more general issue with Sony Corp., however, is one that dogs many Japanese corporations these days – the lack of innovation.
“Ten years ago, these companies were major technology innovators, the creators or leading developers of many electronic products and trendsetting devices such as televisions, digital cameras, portable music players and games consoles,” said Steve Durose, head of Asia Pacific telecommunications, media and technology ratings at Fitch Ratings. “Today, however, the number of products remaining where they can boast undisputed global leadership has narrowed significantly, having being usurped or equaled by the likes of Apple and Samsung Electronics.”
There’s also an issue with brand confusion, with 10 different camcorder models and 30 different televisions. “Sony makes too many models, and for none of them can they say, ‘This contains our best, most cutting-edge technology,’ ” said Sakito. “Apple, on the other hand, makes one amazing phone in just two colors and says, ‘This is the best.’ ”
Sony recently kept services like music, movies and games on their own networks, only recently trying to unite them under the banner of the Sony Entertainment Network. An anonymous former Sony executive said these services “have different looks, feels and user-experiences” and are “super-disjointed. Sony has been talking networks for so long, but there’s really nothing very tangible,” he said.
While Hirai says that the company will focus on mobile devices, cameras and camcorders and games, he has not committed to ejecting the money-losing TV business. “The bottom line is: if you want to be perceived as a creator of cool tech, you have to create cool tech. The challenge for Sony is that those examples have not been there, and they haven’t been there now for a number of years,” said Steve Beck, founder and managing partner at cg42, a management consulting firm. “The tarnish on their brand has definitely begun.”
Source: New York Times