
Sony’s Bread and Butter? It’s Not Electronics - mxfh
http://www.nytimes.com/2013/05/28/business/global/sonys-bread-and-butter-its-not-electronics.html
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nakedrobot2
The issue is a simple one. What brought Sony down is the thing that brings
down all huge companies: they failed to adapt.

All Sony's great successes were in hardware. _Mechanical_ hardware. The
walkman, etc. were all mechanical devices, without any software. Sony was the
king of beautiful mechanical electronics. Before the computer age took hold.

The iPod, etc. are software devices. Yes, they also have beautiful industrial
design, but Sony is capable of that. But Sony is not capable of software.

By the way, Nokia is going down for the same reason.

~~~
nivla
>By the way, Nokia is going down for the same reason.

Given that Nokia was able to adapt enough to come up with Nokia Maps [1]
(Decent mapping app with free offline maps), Nokia Music, Intuitive camera
apps; I must disagree with that statement.

[1] <http://here.com/>

[2] <http://www.nokia.com/us-en/support/product/nokia-music/>

~~~
joezydeco
Nokia bought NAVTEQ. Is Maps because of adapt Nokia engineering or because of
this acquisition?

~~~
nivla
Both. They did get a foothold from the acquisition of NAVTEQ but a lot of
missing features such as real-time traffic, street view and satellite imagery
needed to be integrated. This was completed with the help from Bing.

The offline maps is truly a blessing. Running low on battery but still en
route? Switch off 4G and Wifi, the biggest battery suckers, and the navigation
still works without any hiccup. The last time I was visiting a foreign country
and had no data service, it came in handy too.

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adaml_623
"That profitable part of the business is what Daniel S. Loeb, an American
investor and manager of the hedge fund Third Point, wants Sony to spin off to
raise cash to resuscitate its electronics business."

I find this quite interesting. We have a business that is supplying goods and
paying it's employees. Let's chop it into one part that will survive and make
me money and another part which will most likely die meaning all the employees
are fired.

I can understand the logic from one point of view but I'm not really sure the
decision would benefit anyone other than a small number of investors (not all
of them!) and ... I guess the lawyers and bankers always get their cut.

~~~
Ma8ee
On the other hand, keeping the bleeding part alive with money from another
part of the company means that the prices in the electronics market will be
artificially low, which makes it harder for all other makers of electronics.
Maybe it's better that some electronics makers disappear from the market and
let the remaining ones make a little bit more money, freeing some more
resources for developing new innovative gadgets (or, admittedly, just making
the owners wallets fatter), and maybe hire back some good engineers.

tl;dr: Keeping operations that can't live by themselves alive with external
funding distorts the market, whether it is the government or the corporations
that do it.

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varjag
I think they lost it after the big successes, and got this megalomaniac
mindset that they could establish market standards at will. Their consumer
segment losses due to insistence on things like minidisc or memory sticks must
have been tremendous.

~~~
kalleboo
I think they had a lot of tunnel vision as well. In their local Japan market,
they DID set the standards. You had MiniDisc players integrated in cars, etc.
They just didn't have the international perspective required.

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nathan_long
Sony is into electronics, movie/music production, and insurance?

Reminds me of the Onion story: "Yamaha CEO Pleased With Current Production Of
Jet Skis, Alto Saxophones, Snowmobiles, Power Generators, Scooters, Golf
Carts"

Quote: "At the Yamaha Corporation we're focused on one thing and one thing
alone—quality sound chips, ceiling brackets, editing software, race-kart
engines, sport boats, flugelhorns, ATVs, sequencers, outboard motors,
conference systems, golf clubs, projectors, MIDI controllers, lamp cartridges,
portable recorders, subwoofers, component systems, and motorcycles."

[http://www.theonion.com/articles/yamaha-ceo-pleased-with-
cur...](http://www.theonion.com/articles/yamaha-ceo-pleased-with-current-
production-of-jet,6871/)

~~~
kalleboo
Samsung does the same (they even make cars, and run a chain of gas stations)
and they're doing great in many fields.

~~~
speeder
You forgot Samsung engineering (make buildings), Samsung military engineering
(make military warships), Samsung... I think Samsung manufactures everything
you can imagine.

~~~
kalleboo
Yep. In Korea it's called Chaebol - LG, Daewoo are other examples. In Japan
it's called Keiretsu - for instance Mitsubishi produce almost anything under
the sun (they make everything from beer to the Japanese defense force's
version of the F-16)

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nhebb
> _“The problem is that the board is still absolutely focused on fixing
> electronics”_

I hope they do. I see a board focused on fixing a problem less concerning than
a board in denial. I have a feeling that, as their electronics preeminence
waned, they were probably in denial for a long time. They have decades of
engineering experience, and now that they've hit bottom, it would be a shame
to see them throw it all away.

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dools
Arrrrgh! Out of the miserable swamp of gigantic glowing touchscreen devices,
the xperia mini pro came like a beacon of hope with it's ideally sized qwerty
slider keyword and android upgradeable to ICS.

Nokia, my first love, has already collapsed hopelessly. Not you too, Sony! If
nothing else just keep making fucking phones!!

~~~
fdr_cs
I have to agree. I did love nokia devices (and they are still great, except
for the OS) . Now Sony... :(

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hansc
Their previous CEO was a content guy from Hollywood; Maybe he focused mostly
on the content and insurance stuff and forgot to lead the electronics division
or just didn't have a compelling vision? I always wondered why they would take
a Hollywood guy instead of more of a product guy.

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Narretz
Sony is losing a lot in the TV market, same as Panasonic. I am not sure you
can "fix" the TV market, since the TV's role is still changing, and hardware
innovations become less and less important, so there's no way to go back to
the boom of early LCD. I personally would like to have a "dumb" instead of a
"Smart" TV, basically just a huge display to which I can hook my PC or
whatever box I want. But it'll take some years in which the big guys will
desperately try to keep the old ways alive.

e: previous version of this comment said Sony's Imaging division was quite
healthy, while they are losing money too. But as mirrorless is a new market, I
guess it's worth to lose money to establish a good market position.

~~~
gradstudent
Would you really buy a separate Roku or whatever if your TV had one already
built in? Moreover, what if you could program your TV as easily as your Roku?
This seems, to me at least, a pretty compelling proposition. Stick a PC in my
TV as soon as possible, please!

~~~
Terretta
> _Would you really buy a separate Roku or whatever if your TV had one already
> built in?_

Yes, because the TV is a couple years old and doesn't run today's apps, even
though it has the right number of pixels which haven't changed in a decade.

> _Stick a PC in my TV as soon as possible, please!_

No. Because the pace of development in screens is notably less than the pace
of development in devices, and the cost of building (a probably underpowered)
PC into the TV would end up being a significant portion of the purchase price
without much benefit.

AirPlay changes the equation. Use whatever latest personal device you have,
tap a button to see it on the TV.

It's redundant to have multiple apps with multiple UIs and preferences
scattered across multiple devices, when the tech exists today to have a
primary personal device that you could look at anywhere.

TVs need to get out of the app business, just display HDMI + AirPlay (works
from Android using Twonky Beam, iMedia Share, PlayTo, etc.), and focus back on
visual quality.

~~~
gradstudent
> Yes, because the TV is a couple years old and doesn't run today's apps,

What are you talking about? What apps? All you need for the darned thing to do
is stream media from some wireless storage device (or the internet)!

~~~
eric_the_read
My TV is from 2008, and has exactly zero apps, but still has a fairly nice
display.

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sspiff
I don't fully understand what brought Sony down. They have a strong synergy
between their markets (content production and consumption, for instance), and
their electronic products are still high quality, well designed pieces of
consumer electronics, both on the engineering side as on the product design
side.

They're a company that has tried weird, new kinds of devices, like head-
mounted 3D displays, tablets and ultra-portables. Sure, their attempts at
these things didn't create high-volume markets, but at least it shows to me
that the company is trying hard to innovate, with strong, more traditional
products to back it up.

I find it a bit saddening how Sony fails to sell enough of its products.

~~~
yardie
You can innovate in the lab all you want but if no one is buying your product
because it doesn't answer the right problems is it that innovative. I thought
the AIBO robot was interesting but not thousands of dollars fabulous, you can
get a proper, pedigreed dog for that price.

They have a nasty habit of bringing things to market to fast and then not
properly supporting it. Then when the consumers walk away they blame
everything else but themselves.

~~~
antimagic
AIBO was a big missed opportunity. The unit cost was too high, and the
software not advanced enough. But those things can't have been having a huge
effect on their R&D budget. They could have kept the same mechanical design,
but increased CPU/memory each year, with corresponding work on the AI for
minimal pain, reducing the price and improving the utility each year. If that
work had continued constantly, we would have some truly remarkable AI pets
available by now, which would make the ultimate toy for young children that
live in apartments. That same technology could then have been applied to home
automation robots. Instead we have Roomba.

~~~
yardie
Like you, I thought AIBO was far ahead of its time. So far that I assumed Sony
was using it to improve their AI and would release better products based on
the feedback. Except, they never did. They had a product that everyone saw
wasn't going to sell well and just killed it when exactly that happened.

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robomartin
Contrary to popular belief Sony's electronics products while perceived as
being "superior" or "top of the line", rarely are. Sure, they have a few SKU's
here and there that might be notable. However, the rest of the lineup is
filled yawn-inspiring cookie-cutter products.

From the outside it sure seems like they keep making the wrong product
decisions.

I never knew Sony even had an insurance arm. Profitable too. It sure seems
like they ought to make a swift exit from electronics and focus on insurance.

~~~
kalleboo
Their competitors are also yawn-inspiring, but still profitable.

~~~
robomartin
Perhaps the message is that hyper-commoditized products isn't the best place
to be. The brand means just about nothing to those who understand the
marketplace. I am sure there are folks who still buy Sony TV's and amplifiers
thinking they are the best. That just proves branding can go a long way. I
quit buying Sony a very long time ago. I can't even remember the last time I
thought Sony when shopping for a consumer-electronics product.

~~~
kalleboo
It CAN be a good place to be - clearly Samsung are doing well. But it seems
like competing in a commoditized market isn't what Sony do well.

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speeder
I see this as very depressing, when not even Sony executives understand where
their money came from...

Yes, Sony electronics give a loss, but it is NEEDED.

Why it is needed? Well, because this is how Sony pushes to their bread and
butter clients buy the other stuff.

Sony is profitable making movies, music, and selling equipment for those, Sony
Vegas is profitable, Sony 3D cameras are profitable, Sony Blu-Ray recorders
are profitable.

Now, why Sony would need to sell Blu-Ray recorders, if they did not pushed for
Blu-Ray with the PS3 sold at loss?

Sony eletronics business, was always about pushing technology that results in
content producers needing to pay Sony through their nose to make the content
that match Sony consumer tech.

If you split Sony, you will get a electronics division that gives loss, and a
movie and music division that cannot push the market to where they want
anymore, resulting in the failure of both.

I don't understand much of insurance business, so of course I won't comment on
that.

~~~
kalleboo
> I don't understand much of insurance business, so of course I won't comment
> on that.

If people don't drop a large TV on their feet, they have no need for
insurance.

------
fieldforceapp
Living in Japan for 10 years, Sony was always perceived as closer to the
Virgin Group -- Sony offered a series of consumer friendly services all
wrapped within a unique marketing spin of 'fun, hip, young.' Only some of
those services were electronics related. Their insurance product was marketed
at young women, IIRC, and had good differentiation. Not unlike Virgin Bank I
guess, something UK readers might know something about but which hasn't hit
the States, and likely won't.

Sony's goals aren't the same as Apple or Microsoft and that seems to have
confused the author: Sony sees diversification as a core competency and might
be better off compared to say GE, rather than just a consumer electronics
company:

[http://online.wsj.com/article/SB1000142412788732397500457849...](http://online.wsj.com/article/SB10001424127887323975004578499333200342540.html)

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wavefunction
Sony's electronics division has always been hampered by custom media formats,
restrictive DRM (a side-effect of their media empire), and expensive licensing
schemes. They're an ecology of one, which doesn't make for much of a market.

They did it to themselves.

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lnanek2
IBM did this a long time ago. They analyzed the company, saw services were
where they made all the money, and went all out after that. They sold their
printer division, their laptop division, their storage division. The laptops,
the ThinkPad line, actually had a really good name for themselves and some
businesses and consumers that only bought them. It took some serious balls to
get rid of it. I guess that's the position Sony is in now. It would be good
for the company to drop the unprofitable electronics division, but it's
probably more than they are capable of doing.

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MarkTanamil
Oh Sony. What happened?

Oh well, my xperia z tablet should be arriving this week.

Don't let me down.

