I didn't read the details. ^_^ A decline in revenue does not mean a loss though. I remember the posters mentioned that in the past years, Sony used tax credits to overcome earlier losses. Now they need to do some accounting adjustment. It's paper losses. Sony didn't really lose money big time. Others may be able to correct me or clarify.
Sony is bleeding money - business strategy discussion
- Thread starter -tkf-
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That is my understanding too but they aren't generating it as the rate necessary to warrant carrying some deductions forward hence the tax-write off. Again my understanding I haven't looked at Sony's financials in detail this past quarter.
The simplest explanation is this post (and the linked Financial Times article):
http://www.neogaf.com/forum/showpost.php?p=28002698&postcount=91
http://www.neogaf.com/forum/showpost.php?p=28002698&postcount=91
All good examples, Samsung is a company that completely reinvented itself over the past 8 years. Its hard to understand how Sony would let someone like HTC beat them in the cell phone space too now that I think about it.
In my view...
Samsung is huge (Ship building, medical, aviation, finance, home appliances, etc.). The Korean domestic market fed it well. They can afford to invest heavily and make very aggressive moves. I
their marketing and business sense.
HTC is nimble and focused, which is great too. They have the low cost advantage. But it also means that they need to grab as much marketshare as possible. Would be interesting to see how far they can sustain the momentum.
Like Samsung, Sony is too big to fail. However their businesses are not as robust as Samsung's heavy industries. Amidst challenging economy domestically and globally, Howard Stringer's goal is a measured 5% average margin. In the grand scheme of things, they are "just" regrouping for long term, and juggling to meet some shareholder numbers. They didn't shoot for #1. They don't have to be #1 to survive, and very often they are not. They still make great products though.
Regarding the article...
Perhaps the organization is top heavy (Too many MBA/supervisors, not enough doers ?), but I don't think the so-called "misfits" is the answer to Sony's challenges. Most of these "misfits" are wrong. I have seen many large companies wasting resources chasing after irrelevant dreams.
Only a handful of people have the right talent, ideas and timing. Steve Jobs himself had to trim many Apple projects when he rejoined the company. According to the recent Fortune article on Apple, the engineering managers were running the old Apple instead of Gil Amelio. ^_^ Ultimately, Apple's success is not built overnight. Both Apple and NeXT went no where for a decade. Many people predicted Apple's death over 10 years. NeXT created the precursor to Mac OSX.
While it comes down to the top management focusing their heart and soul in one area, they have to choose the right area to focus first. So... Sony should take the time to work on its fundamentals. Form great teams and condusive environment for success. For now, it looks like Hirai chose Playstation Suite and Network as the first focus.
I'd love to hear what Kutaragi has to say today though. ^_^
Samsung is huge (Ship building, medical, aviation, finance, home appliances, etc.). The Korean domestic market fed it well. They can afford to invest heavily and make very aggressive moves. I
their marketing and business sense.HTC is nimble and focused, which is great too. They have the low cost advantage. But it also means that they need to grab as much marketshare as possible. Would be interesting to see how far they can sustain the momentum.
Like Samsung, Sony is too big to fail. However their businesses are not as robust as Samsung's heavy industries. Amidst challenging economy domestically and globally, Howard Stringer's goal is a measured 5% average margin. In the grand scheme of things, they are "just" regrouping for long term, and juggling to meet some shareholder numbers. They didn't shoot for #1. They don't have to be #1 to survive, and very often they are not. They still make great products though.
Regarding the article...
Perhaps the organization is top heavy (Too many MBA/supervisors, not enough doers ?), but I don't think the so-called "misfits" is the answer to Sony's challenges. Most of these "misfits" are wrong. I have seen many large companies wasting resources chasing after irrelevant dreams.
Only a handful of people have the right talent, ideas and timing. Steve Jobs himself had to trim many Apple projects when he rejoined the company. According to the recent Fortune article on Apple, the engineering managers were running the old Apple instead of Gil Amelio. ^_^ Ultimately, Apple's success is not built overnight. Both Apple and NeXT went no where for a decade. Many people predicted Apple's death over 10 years.
NeXT created the precursor to Mac OSX.While it comes down to the top management focusing their heart and soul in one area, they have to choose the right area to focus first. So... Sony should take the time to work on its fundamentals. Form great teams and condusive environment for success. For now, it looks like Hirai chose Playstation Suite and Network as the first focus.
I'd love to hear what Kutaragi has to say today though. ^_^
I agree it's paper loss this year results are not likely the main offenders. Still it means that the previous year they lose a lot more than they stated. This will raise question about how much the ps3 cost to Sony for decades ...
Anyway it's tough to draw a proper pictures as we don't know part of the taxes cut off could have been tied which a given Sony activity/division, it makes last two years discussion about Sony fiscal and annual results pointless tho.
In my view...
Samsung is huge (Ship building, medical, aviation, finance, home appliances, etc.). The Korean domestic market fed it well. They can afford to invest heavily and make very aggressive moves. I
HTC is nimble and focused, which is great too. They have the low cost advantage. But it also means that they need to grab as much marketshare as possible. Would be interesting to see how far they can sustain the momentum.
Like Samsung, Sony is too big to fail. However their businesses are not as robust as Samsung's heavy industries. Amidst challenging economy domestically and globally, Howard Stringer's goal is a measured 5% average margin. In the grand scheme of things, they are "just" regrouping for long term, and juggling to meet some shareholder numbers. They didn't shoot for #1. They don't have to be #1 to survive, and very often they are not. They still make great products though.
Regarding the article...
Perhaps the organization is top heavy (Too many MBA/supervisors, not enough doers ?), but I don't think the so-called "misfits" is the answer to Sony's challenges. Most of these "misfits" are wrong. I have seen many large companies wasting resources chasing after irrelevant dreams.
Only a handful of people have the right talent, ideas and timing. Steve Jobs himself had to trim many Apple projects when he rejoined the company. According to the recent Fortune article on Apple, the engineering managers were running the old Apple instead of Gil Amelio. ^_^ Ultimately, Apple's success is not built overnight. Both Apple and NeXT went no where for a decade. Many people predicted Apple's death over 10 years.
While it comes down to the top management focusing their heart and soul in one area, they have to choose the right area to focus first. So... Sony should take the time to work on its fundamentals. Form great teams and condusive environment for success. For now, it looks like Hirai chose Playstation Suite and Network as the first focus.
I'd love to hear what Kutaragi has to say today though. ^_^
I brought up Samsung becuase of their quick rise virtually out of nowhere to a well respected home theater hardware company. It started with their DLP line of TVs but they were able to keep up with the times and still have a formidable foothold in consumer electronics even after the decline in interest in DLP so they are focused enough on what they are doing to still be a leader.
Similarly HTC has secured a strong foothold in the cell phone market which is basically this generations version of the walkman - a portable device that everybody under 25 has to have but can't spend a lot of money on. How did Sony allow HTC or anyone else for that matter beat them in that segment? I agree with you that a more narrow focus would be good for the company and like you a don't think that misfits are the savior of the company.
The organization however is too fragmented, too insulated, too slow to change and frankly out of touch in many ways and these inefficiencies are why they jack of so many trades and a master of none.
Aside from some nice LCDs I don't see anything special about Samsung's home theater penetration. They don't make good projectors, they don't make good HT receivers, they don't make good speakers. Samsung is LOW on the list of home theater CE manufacturers. SONY at least have their highend ES line of CE. Samsung phones don't stand out either, but they are good at flooding the market with a crap load of them.
The only cool and stand out products Samsung has made is the gloss black line of laser printers with soft touch controls.
Aside from some nice LCDs I don't see anything special about Samsung's home theater penetration. They don't make good projectors, they don't make good HT receivers, they don't make good speakers. Samsung is LOW on the list of home theater CE manufacturers. SONY at least have their highend ES line of CE. Samsung phones don't stand out either, but they are good at flooding the market with a crap load of them.
The only cool and stand out products Samsung has made is the gloss black line of laser printers with soft touch controls.
They are also one of the few doing plasma and they seem to be doing quite well with BR players (differentiating on features). I totally disagree WRT smartphones. Galaxy S II is THE phone to have. I can't wait to get my hands on one of these when they are finally available on contract in the U.S.
Aside from some nice LCDs I don't see anything special about Samsung's home theater penetration. They don't make good projectors, they don't make good HT receivers, they don't make good speakers. Samsung is LOW on the list of home theater CE manufacturers. SONY at least have their highend ES line of CE. Samsung phones don't stand out either, but they are good at flooding the market with a crap load of them.
The only cool and stand out products Samsung has made is the gloss black line of laser printers with soft touch controls.
I don't want to derail the thread discussing Samsung's quality but Samsung makes well respected mid-range (3k to 20k) projectors, the A900 and A800 for their time come to mind. Similarly their DVD and Blu Ray players are viewed as quality as well and you already mentioned their LCD TVs. I do agree with you about receivers but I strongly disagree with you about the phones, while the Galaxy series has some software issues which are well known the hardware is viewed by many as the best.
Trying to tie this into the thread, the reason I originally brought up Samsung and HTC was because they are 2 companies competing against Sony and for the nonaudiophiles average consumer going to Best Buy to by a TV, DVD player, cell phone, ect their products have as good a reputation if not better in some cases than Sony for consumer electronics. Going back 20 years ago this same group of consumes when they bought a TV for the most part wanted a Sony Trinitron TV period, that tech was viewed by many consumers as hands down the best you could buy (again speaking about nonaudiophiles types).
How did Sony lose the perception that their products are so much better in these markets which arguably at one time they owned? Again with HTC, they are ubiquitous with the cell phone market and they go from design to manufacturing incredibly quick, their software updates are very fast. HTC is extremely focused on making phones, making tomorrows phones and updating yesterdays phone thru software to keep their consumers coming back. Today's cell phone market was the portable tape player market 25 years ago but while Sony dominated that market with the Walkman line their cell phones are not generally viewed as market leaders and their updates to existing products is terribly slow.
I think Sony has lost its edge and become complacent in many areas but I brought up these 2 examples because televisions/home theater and cell phones/walkmans are excellent examples of markets Sony dominated >20 years ago whereas today they are not much different from their competitors. The hardware business has seen margins cut dramatically and I don't see how Sony stays profitable unless they narrow their focus and start releasing products into the market place which justify paying a premium.
They have been around for some time. Among other things, HTC worked on Windows Smartphone and then ditched them and focuses now on Android devices. There was a void and they rushed in. I have no idea wassup with Sony Ericsson.
Samsung rode on the LCD wave. Sony did not invest in large size LCD panel and missed the boat. So they have to work with Sharp and Samsung to catch up. I think Sony were and still are working on OLED. Perhaps they banged on early success in large OLED screen and it proved too difficult.
EDIT:
It's something Howard and his lieutenants have to follow through. They have done a lot to consolidate the various divisions, but there are still much to be done at the grassroot level.
I wouldn't say they are a master of none. They are among the top (e.g., Sony's 3DTV is actually better than Samsung's), but the competition is fierce -- which is great for us. Their main issues are cost and speed of execution.
With regards to the TV business that's pretty easy to answer. Back in the day when CRT were the norm SONY made the best TVs because they invented the vertically flat Trinitron tube while their competitors were stuck with standard curved tubes. When display technology moved to plasma/LCD they were caught off guard. Pioneer, NEC, Fujitsu and Panasonic made the best plasmas while Sharp made the best LCDs. Back then SONY didn't have a plasma manufacturing plant so they skipped plasma tech and invested in LCD tech along with Samsung. Now they're playing catchup. However they did make the first OLED tv but it was small and very expensive.
As for the rest like cellphones, well todays market is vastly different than before. There are a bunch of cellphone makers that make very competitive phones so it's very difficult to make something that stands out from the rest but it's not impossible ie iPhone. The Playstation phone is a start but we'll se how that turns out.
I thought it was Sony getting caught up in the shift in market demand for cheaper flat screens. Sony if I'm not mistaken was the leader in flat screen TVs in 2007 or 2008 until Samsung passed them up and then were passed up by Vizio in 2009. Basically the recession pushed most of demand into the lower end price spectrum and Sony couldn't overcome that trend with highend quality but pricey products.
Both are correct. Sony did not invest in large LCD panel manufacturing, and the trend picked up first. Once the market is commoditized, their cost is too high to play there. That's why Sony is interested in bleeding edge stuff like 3DTV and GoogleTV first.
I don't know if they are keen in low margin products. I don't think they aim to be #1 in volume in the first place.
EDIT:
The increasingly short CE lifecycle is also why they are keen in platform play like Blu-ray... because they can benefit from all Blu-ray player sales.
I don't know if they are keen in low margin products. I don't think they aim to be #1 in volume in the first place.
EDIT:
The increasingly short CE lifecycle is also why they are keen in platform play like Blu-ray... because they can benefit from all Blu-ray player sales.
A couple questions;
- what do you guys think Sony will do with the pricing of the NGP? Will it be sold below par to gain market share (some think Nintendo is vulnerable at the moment with the 3DS). Any thoughts on it's MSRP in USA, in Europe and in Japan?
- Why hasn't Sony going after the tablet market? I think there is room for some decent margins there, consumers aren't really buying the <200 cheap tablets. I thought an android based VAIO tablet would have been a great opportunity to strengthen their working relationship with Google.
- Any thoughts on PS4 developement? I think the NGP could be a sign of a shift in philosophy (that was already likely with the loss of Ken) but what do you think we can conclude about PS4 from all of this? Will the R&D budget be smaller, will we see stronger emphasis on software and developement tools/teams and less on hardware? Can Sony afford to take big risk like they did on PS3 and Cell moving forward?
They have two Android tablets coming.
http://m.engadget.com/default/artic...oneycomb-tablets/&category=classic&postPage=1
http://m.engadget.com/default/artic...oneycomb-tablets/&category=classic&postPage=1
... because you didn't check gadget sites frequently enough.
And Sony's PR people are not doing enough to spread their own goodness.
Sony said they want to take their time to make something they are happy with, instead of rushing out a me-too. Remember they are generally not keen to compete with price.
I have an iPad. Am deciding whether to get S2 or NGP.
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