Sony Pursues a Bold Success to Match Its Scale
March 29th 2010 06:22
From: New York Times
“It’s just like the Apple store,” laughed Yuka Hara, 23, a publishing company employee who was one of thousands of visitors on the store’s first day of business this month.
The store’s copycat design, although more hip and up-to-date than the company’s traditional Sony Style retail outlets, is emblematic of Sony’s struggle to regain its footing in recent years after a host of missteps: the company always seems to be playing catch-up instead of leaping ahead.
“Sony once hit home runs, but now it’s lost its touch,” said Akihiko Jojima, an analyst and author of the book “Sony’s Sickness.” “Sony still makes competent products but they’re all just boring ground balls.”
It’s been a humbling fall for the company, which once shook up entire categories of electronics with its Walkman music player and PlayStation game console, and commanded premium prices for top-quality products.
In the last few years, its position as a consumer electronics titan has been usurped by more nimble competitors. The iPod from Apple dominates digital music players. In gaming, both the PlayStation 3 and its PlayStation Portable consoles from Sony trail the competing Wii and DS machines from Nintendo — and the DS is about to get a 3-D upgrade. Samsung Electronics leads in the global flat-panel TV market, a traditional stronghold of Sony, based in Tokyo.
Sony’s pioneering e-book reader lost its early lead to the Kindle from Amazon.com. And in the fast-growing smartphone market, an important area for future growth, Sony’s hands have been tied. Under a 2001 deal that spun off its mobile phone operations into a joint venture with Ericsson, Sony has been prevented from offering cellphones that draw heavily on its own other technologies.
All the while, Sony has failed to leverage the wealth of content at its music and cinema arms to the advantage of the wider company.
Sony, while acknowledging its past stumbles, says that its comeback has begun.
“We will go on the offensive in 2010,” said Yoshihisa Ishida, a Sony senior vice president, at the unveiling of a new 3-D television in Tokyo this month. Sony will begin selling 3-D TVs in June, joining an industrywide push to bring the technology behind the hit movie “Avatar” from cinemas to living rooms.
In the next few weeks, Sony will introduce a new online service that will eventually let users download music, television shows, movies and games from the company’s extensive library onto gadgets like computers, Blu-ray players, televisions, game consoles and digital cameras. The network, tentatively called the Sony Online Service, will be based on the company’s existing PlayStation Network, a game download site with more than 40 million accounts.
Sony is working with Google and Intel on Google TV, a platform for a new generation of televisions and set-top boxes that will make it easier to browse the Web on TV screens. The first devices featuring the technology are expected to be on sale this summer.
The company is also working on tablet computers similar to the coming iPad from Apple. “You’ll see many different products that you can probably compare with the iPad,” said a Sony engineer who asked for anonymity because he was not authorized to speak to the news media.
Whatever the mode of attack, the next steps by Sony’s chief executive, Howard Stringer — who promised to make Sony “cool again” when he took the helm at the manufacturer in 2005 — will be critical.
Sony’s finances, battered in the global financial crisis, are finally improving after an aggressive cost-cutting drive and a revival in sales. In the final quarter of 2009, Sony surpassed analysts’ expectations with a sevenfold increase in profit, to 79 billion yen, or $853 million.
And with Mr. Stringer’s favorite lieutenants finally in place after a management reshuffle last year, investors hope that he can finally focus on his oft-stated vision to link Sony’s hardware with its software. Sony’s stock price has doubled in the last year, outperforming the broader Japanese stock market.
“If you add up all of Sony’s cellphones, digital cameras, music players, computers, you get a network that would dwarf Apple’s,” said Eiichi Katayama, a technology analyst at Nomura Securities in Tokyo. “And Sony also has content. They could become a force to contend with.”
3D is coming - stay posted
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