Sony is bleeding money - business strategy discussion

[Shifty Geezer]

With all the promise and investment in SED, it'a a bit surprising that things have kinda levelled at tech from 20 years ago. OLED is the only fundamental progress on market. Tritosine5g will be here in a bit to tell us the future is Quantum Dot. Which it might be, but no-one's actually releasing products yet. How long did it take Sony to get from OLED prototypes to the first commerical TV? And how long from that original 21" to a decent 32+" TV? If this joint venture can get a new, workable tech to market, Japan may be able to win back the TV crown.

 

[patsu]

LG is pretty good. Samsung is great too since they OEM for many leading products.

They lost out on 3DTV and Blu-ray players because they didn't think both would stay around for long. Vizio is giving them some hard time on the TV front. But Samsung is a humongous group. I don't think anyone in their industries would underestimate them.

 

[Shifty Geezer]

Samsung? Really?

I have two faultless, silent Spinpoint HDDs, a TV monitor I'm using now with excellent useability on PS3 and PC, and a Sammy TV downstairs. They also have good interfaces. The Samsung digicam my Mum had good software, unlike Sony's utter poop (bro'-in-law was asking for camera advice, and where a Sony was an option, inclusion of PMB I consider a considerable deterrent!). The Galaxy Tab was the first real competitor to Apple IMO. All-in-all Samsung seem good all-rounders in price, performance, and useability.

 

[wco81]

They know how to copy the UI and ID of successful products.

 

[patsu]

To some extend we don't need Sony for that, a lot of French channels for example offer replay of their shows through the net (for free) so it's accessible with tablets or smart phone.

Not at that level. For real interactive contents/TV, the content provider should be empowered to add more interactive tags into the video content. And of course if they can throw in more display tech (3D or beyond), then it may be interesting too. Natural interfaces for TV is another good direction. Recording and replaying contents over the web/mobile network is not so unique anymore. Searchable video in a deep way will be welcomed too.

 

[AlphaWolf]

Samsung? Really?
I mean they have cheap and usable products, but I really dont think highly of them - after having bought several HDDs and a couple monitors. Their stuff just oozes cheapness, HDDs are all vibrating like hell and the monitor I have now doesnt have a firm stand, rather substandard contrast (specs would say different) and and has notable metallic humm if you drop something on the desk. To me they stand for cheap substandard discounter-products, nothing I even look at when throwing out a significant amount of money (like a TV).

I`d go for a LG or Sony for a good value TV.

Have you actually looked in the last couple of years? The high end samsungs LED TVs are very slick looking, tiny bezel and very thin with lots of features (smart TV). They test pretty much equal in terms of quality with LG, Sony, Sharp or Toshiba et al. in the same price range.

As of July this year Samsung accounted for 60% of the 3D TV sales in the US (just to illustrate I'm not talking about bargain sales), so apparently the market doesn't agree with your opinion.

 

[patsu]

Sales is not everything. Samsung TVs have high quality and are reasonably priced. But I remember earlier this year, Some Samsung 3DTV models have sync issues (The active glasses would lose sync).

 

[Shifty Geezer]

Sales is not everything. Samsung TVs have high quality and are reasonably priced. But I remember earlier this year, Some Samsung 3DTV models have sync issues (The active glasses would lose sync).

Every company gets bad products every once in a while. that single event doesn't make Samsung no good and Sony better, and Sony+Toshiba+Hitachi can't win back market share by just hoping Samsung make lots of mistakes! Sony used to own the TV space because they deserved it. They then lost that and Samsung own it because they deserve it (in business terms anyone who is leading deserves it even if their products are overpriced crap!). The next 5-10 years will belong to whoever competes best.

 

[patsu]

I agree, but I'm saying Samsung's 3DTV quality is not that great despite great sales. They just don't focus on it as much as LG, Panasonic, and Sony. The out-of-sync issues was a problem (You can see complains on Youtube).

It's the HDTV inside that's awesome. LG carved a space for itself using passive 3D. Sony has deeper 3D tech.

As I mentioned above, Samsung is a formidable competitor nonetheless. The company has always responded well and quickly to the market (e.g., They also sell Plasma 3DTV pretty quickly).

 

[RobertR1]

Speaking of 3D, some of Sony's decisions just leave me confused. Here's a company that's heavily pushing 3D and yet they decided to not bundle glasses with their sets. Amazing.

As for 3D quality, the best one right now are the new Elites which are made by Sharp, not to mention they provide the best 2D quality also.

 

[AlphaWolf]

Speaking of 3D, some of Sony's decisions just leave me confused. Here's a company that's heavily pushing 3D and yet they decided to not bundle glasses with their sets. Amazing.

Probably has to do with the fact that most consumers aren't actually buying the sets for 3D, but yes if they want to push the tech they should be trying to show it off, adding to the cost of entry isn't going to get that done.

As for 3D quality, the best one right now are the new Elites which are made by Sharp, not to mention they provide the best 2D quality also.

While I mentioned 3D sales, I was only meaning to demonstrate that Samsung sells well at a higher price point not just the low end so consumer perception isn't that of poor quality/cheap for Samsung. I think generally being viewed as good is probably more helpful than having the 'best' product that exists outside of most peoples price range (even more so when the Elite brand exists in very small numbers with only 2 (large/expensive) products)

 

[djskribbles]

Samsung? Really?
I mean they have cheap and usable products, but I really dont think highly of them - after having bought several HDDs and a couple monitors. Their stuff just oozes cheapness, HDDs are all vibrating like hell and the monitor I have now doesnt have a firm stand, rather substandard contrast (specs would say different) and and has notable metallic humm if you drop something on the desk. To me they stand for cheap substandard discounter-products, nothing I even look at when throwing out a significant amount of money (like a TV).

I`d go for a LG or Sony for a good value TV.

Samsung HDDs are considered one of the most reliable HDDs by many.
Their TVs aren't the most reliable (reliability isn't bad, just not great), but they are consistently among the best when it comes to performance (LCD/LED and now even Plasma with the D series).

LG is a great value brand, but Sony is generally a little more expensive (at least in North America). I do consider them to be more reliable than Samsung.

 

[NavNucST3]

I agree, but I'm saying Samsung's 3DTV quality is not that great despite great sales. They just don't focus on it as much as LG, Panasonic, and Sony. The out-of-sync issues was a problem (You can see complains on Youtube).

It's the HDTV inside that's awesome. LG carved a space for itself using passive 3D. Sony has deeper 3D tech.

As I mentioned above, Samsung is a formidable competitor nonetheless. The company has always responded well and quickly to the market (e.g., They also sell Plasma 3DTV pretty quickly).

Do you consider any of the companies you listed as having great 3D on their TV sets?

 

[patsu]

After seeing HMZ-T1, standard 3DTV still has some way to go ! ^_^
They need to improve the HMZ-T1 harness, price, and make it support "plugins".

I like Plasma 3DTVs too.

RobertR1 mentioned Sharp Elite. Those should be more expensive than the average sets (Well over $5000). ^_^

 

[NavNucST3]

I haven't read it yet but when I picked up my Bloomberg Businessweek this morning I noticed that Sony was on the cover with a sick Walkman and headline: What is Sony now?

edit: Here you go

Much of this we have been over in pieces here and there but it is certainly interesting to read an article like this which puts much of the problem in a single space. There are all types of great lines in there especially about fiefdoms but this one is probably my favorite:

As summer went on, the 34-year-old analyst became more inclined to agree with the sales staff. His reports got crankier. In an Aug. 30 report titled “Pushing Reset,” he downgraded his rating to “neutral” and noted something remarkable. For the past nine years, the business that has accumulated more profit than the rest of Sony combined is financial services, mostly life insurance, with some auto insurance and banking. “Sony,” Loff says, “is a life insurance company with a money-losing TV business.”

 

[patsu]

I read it. Disasters and world economy aside, here're the reported issues:

Sony has been trying to adapt to the Internet Age for at least a decade, yet remains a gargantuan and unwieldy manufacturer, with 168,200 employees, 41 factories, and more than 2,000 products from headphones to medical printers to Hollywood-grade 3D movie production equipment. Jeff Loff, a senior analyst with Macquarie Capital Securities in Tokyo, points out that Sony sells nine different 46-inch TV models in the U.S. and its mobile-phone joint venture with Ericsson offers more than 40 handsets. “Can you imagine how dilutive that is to your R&D?” he says. A Sony spokesman says the number of phones is being reduced, and notes that Samsung has 15 different 46-inch TVs.

In the traditional CE space, manufacturers tend to optimize their pricing based on different models. They may have gone too far and too heavy.

The second problem is also easy to identify when Stringer came on board...

Stringer also encountered a hardware-worshipping culture that mistrusted him because he wasn’t an engineer. He was a “content guy” who supposedly cared less about making devices than pushing movies and music. “Whenever I mentioned content,” he says, “people would roll their eyes because, ‘This is an electronics company, and content is secondary.’ ” That resulted partly from longtime rivalries between engineers in Japan and generally better-paid movie and music people in California. Sony’s consumer electronics unit sometimes declined to send products for use in Sony movies even as Samsung was generating buzz with placements of its phones in blockbusters like The Matrix.

Stringer was alarmed to learn that there were software developers working on different product lines who had never even met. He threw them a cocktail party so they could exchange business cards and ideas. At Sony’s annual management conference at Tokyo’s Grand Prince Hotel New Takanawa in 2006, he set aside prominent seats for software developers to stress their importance to the company’s future.

Perhaps the most walled-off of Sony’s product silos was Sony Computer Entertainment, the unit that produced the PlayStation video game system.

Don't know how they are going to fix the ship. They have improved but more need to be done. One of the key problems for their TV business is inventory cost and production cost. Since the price erodes faster than they can make and sell the units, they will continue to suffer losses. The problem affects all major TV manufacturers, 'specially Japanese makers (which is why they now join forces with the Japanese government's $$$ support to consolidate small screen demand).

Count themselves lucky to have a financial arm to cushion the impact. The recent disasters didn't take down the insurance arm. I suppose more Japanese entities will sign up for assorted policies moving forward. If their business is domestic, then the Yen won't affect them too much.

 

[Shifty Geezer]

The second problem is also easy to identify when Stringer came on board...

Stringer also encountered a hardware-worshipping culture that mistrusted him because he wasn’t an engineer. He was a “content guy” who supposedly cared less about making devices than pushing movies and music. “Whenever I mentioned content,” he says, “people would roll their eyes because, ‘This is an electronics company, and content is secondary.’ ”

So boommoob1 is a Sony employee! If all the departments had been getting along and the content and services had been crafted and implemented in a unified Sony experience, Sony wouldn't be in this mess. Probably not where Apple are because Sony's design is lacking, but they'd be seeing large market share all round.

 

[NathansFortune]

A properly unified Sony which took proper advantage of their amazing vertical integration would be a force to reckon with.

I really, really think Sony's last chance to be successful in TVs is to go all in with OLED and dominate manufacturing of large OLED panels and corner the market before the Korean players with super cheap North Korean labour get in. I get the feeling that Sir Howard's TV is going to be a large screen OLED, or they will have a 40-60" OLED on show at CES with their new unified front as a halo device. I have also heard lots of rumours about their cable service, if they are true then I think it is an area where Sony can dominate because they have the implicit backing of their own content divisions and other movie studios because of their position in the industry.

 

[RobertR1]

If Sony came out with a badass TV I'd be the first in line to get one.

Perfect color, infinite blacks, no off axis issues. Make it happen and take my monies! I really think they could do what Apple has done.

Don't even try to enter the price wars. Instead make something really different (but good!) charge a premium and if you execute it right, you're gold. If you don't atleast you went all in vs a slow death which is exactly what they're experiencing right now.

 

[patsu]

A properly unified Sony which took proper advantage of their amazing vertical integration would be a force to reckon with.

I really, really think Sony's last chance to be successful in TVs is to go all in with OLED and dominate manufacturing of large OLED panels and corner the market before the Korean players with super cheap North Korean labour get in. I get the feeling that Sir Howard's TV is going to be a large screen OLED, or they will have a 40-60" OLED on show at CES with their new unified front as a halo device. I have also heard lots of rumours about their cable service, if they are true then I think it is an area where Sony can dominate because they have the implicit backing of their own content divisions and other movie studios because of their position in the industry.

They will need to cut the extras at the same time. Even if they have a winning design on hand, they will need to commit more $$$ to market and distribute it at a good price. It is not a company that rolls out subpar hardware. Even today, they have good and interesting products every now and then. Problem is they adopt the slow and traditional marketing approach. The SKUs will have too low volume and too high price, before others catch up.

The extra complication from their many SKUs approach drains marketing funds and dilute R&D resources. e.g., Playstation Suite would be easier to implement if they have more controlled rollout and fewer SKUs.