The Pride That Killed Sony !

Discussion in 'Playback Devices' started by terence, Nov 5, 2003.

  1. terence

    terence Supporting Actor

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    Interesting article from Forbes, they talk mostly about TV's but electronics as a hold.

    The Pride That Killed Sony

    Benjamin Fulford, 11.05.03, 7:00 AM ET

    TOKYO - The once seemingly-invincible Sony has stumbled during the stewardship of Chairman and Chief Executive Nobuyuki Idei. Sales and profits have plunged and the company has been forced into a major restructuring. Idei spent so much time thinking about telecommunications and the Internet that he ignored the company's core electronics division and key products like televisions.

    The poor state of Sony's electronics was on display for all to see at the recent Ceatec Consumer electronics show in Tokyo. Its competitors had huge displays chock-full of innovative products, notably flat panel TVs, 3D displays, hard disk recorders, mobile devices, home servers, fuel cells and more. Sony's modest booth had at best one product that the other consumer electronics companies envied: the PSX, a combination DVD recorder and PlayStation 2.

    To those who have visited Ceatec over the years, the weak Sony (nyse: SNE - news - people ) display was in sharp contrast to the overwhelming shows of previous years. Precious management resources have been spent on things like Sony's mostly failed efforts to set itself up as a broadband internet provider in Japan and similarly failed efforts to become a major internet presence.

    Sony has suffered from hubris, the pride that kills. Several years ago, a Sony executive told me that because it no longer had "any real competitors" it must concentrate on its "creative dreams." No longer. On October 28, Sony held a press conference, in a hall filled with over 1,000 journalists, to announce a major restructuring to cope with plunging sales and profits. At the same time, at a smaller venue, Sony's arch-rival, Matsushita Electric Industrial (nyse: MC - news - people ), announced that profits for the fiscal half-year ending in September were up 59%, a sharp contrast with Sony's 51% plunge for the same period. "I am surprised Sony made the restructuring announcement at the same time as Matsushita announced its results; in previous years they would not have cared what we were doing," said Yukio Shohtoku, head of Matsushita's international operations.

    [​IMG]

    At the Sony conference, a Sony executive recalled how the flat-screen TV was a dream until Sony produced it. He was referring to the Trinitron and Wega flat-screen cathode ray tube televisions that once made Sony king of the living room. These production lines are now being restructured because consumers have moved on to thin, hang-on-the-wall TVs, notably plasma TVs made by Matsushita and LCD TVs made by Sharp (otc: SHCAY - news - people ). The former king of TV was forced to ally itself with Samsung, a Korean upstart, to keep its hold in the TV business.

    What is true of TVs has become true of many business lines. For years consumers were willing to pay a premium for the Sony name. Recently, however, more and more of them have realized the name is not giving them extra innovative value. Vaio computers, for example, use basically the same components as computer makers in Taiwan and elsewhere: chips from Intel (nasdaq: INTC - news - people ), software from Microsoft (nasdaq: MSFT - news - people ), DRAM and hard disks from a limited circle of makers. There is nothing to differentiate a Vaio except snazzy design. Sony's high cost base--its well-paid, lifetime employees in Japan--means it cannot compete on price.

    Other products that have generated much media attention, like Sony's robot toys, have yet to become big business. Apart from PlayStation 2, there is no truly unique Sony blockbuster product to justify higher prices anymore.

    There is an upside to Sony's stumble, however. The shock of having once-derided competitors grab market share from it across a broad range of products means that Sony is no longer complacent. It will cut 20,000 employees, reduce its supplier base to 1,000 from 4,700 and slash the components it uses to 100,000 from 840,000. It is also focusing many more management resources back on the core electronics business and away from fuzzy Internet dreams.

    Sony still has one of the world's best concentrations of top engineers and brains. Once Idei rides off into the sunset as an 'adviser,' the maverick Ken Kutaragi, creator of PlayStation and PlayStation 2, is expected to take over. This could happen in 2005 as PlayStation 3, the broadband super computer on a chip, hits the markets around the same time broadband communications becomes widespread. Kutaragi, who gets on notoriously badly with Idei (he once told me he stopped reading a Wall Street Journal article about himself as soon as he saw the name Idei in it), hopes to lead Sony as it pioneers entirely new types of entertainment that mix Internet, TV, games and movies.
     
  2. JackS

    JackS Supporting Actor

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    Interesting article though I doubt this has much influence on Sony ES. It's my understanding that the ES part of Sony was intentionally seperated to remove admin bigwigs oversized thumbs from this part of the pie. This allows for more creativity and an expediture of resources not common or condoned in the pursuit of mass market supremecy. We'll see.
     
  3. terence

    terence Supporting Actor

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    Jack i hope you are right, but that would explain why the ES line has gone up & down over the years.
     
  4. Wayne A. Pflughaupt

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  5. ToddP

    ToddP Stunt Coordinator

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    I would imagine they are referring to a 51% decline over the same period from the prior year. Not a straight drop of 51% in six months time.
     
  6. Mark All

    Mark All Second Unit

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    Actually, it's a 51 percent drop in profits compared to the same period the previous year, not a 51 percent drop in sales. A 51 percent drop in sales could have triggered a much larger drop in profits. There are a large number of accounting factors that could contribute to a corporation's decline in profits.

    Regardless, restructuring is good for any company after it reaches the bloated state Sony has (840,000 individual components used in its products!). Hopefully this will indeed focus Sony more on what we really want from them--a range of innovative A/V equipment that leads the field in technology and performance at multiple price levels. Until then, they always have Playstation to fall back on.
     
  7. terence

    terence Supporting Actor

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  8. Kwang Suh

    Kwang Suh Supporting Actor

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    I hope this improves the reliability of their products.
     
  9. Philip Hamm

    Philip Hamm Lead Actor

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  10. Garrett Lundy

    Garrett Lundy Producer

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    Heres some "innovative" products SONY could clean house with:

    *400 disk CD/DVD/SACD/DVD-A/CD-R/RW (Including WMA, MP3, and AAC CD's) changer. Burr-Brown or better DACs. The ability to play "flipper" disks, Price at $599 or less.

    *VCR input/output, in additon to having component video, to include a single cable digital audio connector.

    *DVD-recorder to use digital audio input (for recording).

    *New line of seperate systems, as awesome as the Ta-e9000es/Ta-N9000s were. Build both 7.1 and 5.1 systems (Not everybody can use or wants the additional channels).

    *New 5.1 ES-level reciever with dual 5.1 analog inputs.

    *Reengineer all SONY A/V recievers and Pre-Amp/Controllers to include 5 A/V inputs (including a VCR input/output) that have HD-capable Component level switching AND a single-cable digital audio connection.

    *Make all SONY Pre-Amps/Recievers PS/2 keyboard compatible and make EVERY input custom labelable.

    *Make stuff available in Black as well as Silver. I personally wont buy the SACD mega-changer because its silver.

    *Recievers with single Hz-increment adjustable bass management. Available for all channels and adjustable for each decoder (So DTS and DD can finally have the same subwoofer settings).

    *60" Plasma monitors for under $5999

    *Plasma and LCD displays with full 1920 x 1080 HDTV native resolution

    And my BEST IDEA:

    *Totally reinvent the programable remote control. Make it adaptable and relabelable (possible using a PC/Mac interface?), including "Smart" Macros that can have independant item power toggles. Remote should not have changable batteries, but require a base-station (less stuff to deal with)...and most importantly... Make it as small and easy to use as an Apple iPod!
     
  11. Kwang Suh

    Kwang Suh Supporting Actor

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    What the heck are you doing?!? Giving away ideas for free? [​IMG]
     
  12. Garrett Lundy

    Garrett Lundy Producer

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    By the time I get an engineering degree and form a company to manufacture electronics equipment all the listed stuff will be really-old tech.

    I figure if I flat-out tell people what to make then maybe a company (not necessarily SONY) will "borrow" my excellent ideas and produce the equipment that I would build if I could.

    And none of my ideas are radical or new. They are a collection of products that can be created from existing parts & technology (No 10.5 surround formats) that fufill the wants of technophiles & A/V enthusiasts that can be engineered for little cost (Because most of it is current-product improvement rather than replacement).

    Is there some way i can mail this list to SONY?[​IMG]


    Really how much does an extra component input or two cost to manufacture into a reciever?

    PPS: Almost forgot, 30-day memory back-up battery built into all electronics that have adjustable settings so consumers do not need to recalibrate their systems every time they unplug the TV or there is a blackout.
     
  13. Mark All

    Mark All Second Unit

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  14. CurtisC

    CurtisC Second Unit

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    And they thought I was crazy when I said Sony needs to include DVD-A on its dvd players.I was told Sony didn't cater to my puny $1k,guess they should rethink it AGAIN.I DO understand that sacd is Sony's baby but what kind of crack pot co excludes the latest tech? Just sayin'.
     
  15. Will_B

    Will_B Producer

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    Sony will probably include DVDA, after all they were the first to release a combo DVD-R, DVD+R format burner, despite pressure not to. And now everyone is doing so.

     
  16. Garrett Lundy

    Garrett Lundy Producer

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    And a "page" button on the base station so the remote will "beep" its way out of hiding! (Usually under the couch or in the bathroom).[​IMG]

    As for the equipment colour: I wouldn't mind silver except that most of my equipment is already black. Silver would be OK if all my black equipment was replaced by silver equipment (maybe some updated Sony recievers, nudge, nudge).

    Actually, if its all the same color my equipment could be gold or lime-green. Actually, lime-green would be sweet!
     
  17. Rich Wenzel

    Rich Wenzel Supporting Actor

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    instead of coming out with a $6k 60 inch plasma, which sounds highly unlikely...they should come up with innovative ideas like the way panasonic improved black level performance on their plasmas...

    Rich
     
  18. Garrett Lundy

    Garrett Lundy Producer

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    Thats my fault, I meant a 50" Plasma.[​IMG]
     
  19. Rachael B

    Rachael B Producer

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    Sony once had about 30% of the DVD player market, worldwide. They've had a slow steady decline the last few years. Last time I looked they were down to 21% and that was atleast 6 months ago. I believe failure to include DVD-A on their players has cost them dearly. Myself, I'm quite sure I would of purchased the 999ES, IF, it had included DVD-A capability. Denon and Pioneer and others are getting fat on uni players and Sony sits on the sidelines. Sony is just giving away the most profitable market segment...for PRIDE! I've questioned Sony's leadership and poor U.S. marketing practices for many years.
     

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