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Lunchtime Briefing: Sony Baloney

Frank Ahrens

I've been meaning to do a What's Wrong With Sony? piece for some time. Props to the New York Times for sorta beating me to it today, taking a look at the company pegged to the Great Flaming Battery Recall.

I have a bigger question, though, on Sony, and I'd like your feedback: How did Sony blow it?

When I was accumulating my home entertainment units 10 years ago, with a tuner, CD-changer, casette player (can you believe it?) and TV, I bought all Sony products. They were the gold standard for reliable, reasonably affordable electronics, if you didn't want to pay a factor of 10 more for Bang & Olufsen and other boutique brands.

Sony had the portable music and portable TV market locked down tight, with the Walkman, Discman and even Watchman. At one point -- I checked -- Sony had something like 75 percent of the mobile music market.

Five years ago, I thought they were ready to rule the world: They had the best electronics AND they had a movie studio, a television syndication business and a music label. The total marriage of content and delivery.

Then, the iPod happend.

And Sony had no answer.

A former Sony exec told me that the company has too many silos -- i.e., individual busines units -- that don't talk to each other. So, Sony, the TV-making unit, doesn't talk to Sony, the movie studio, about how to deliver Sony movies to Sony TVs.

A large part of the blame falls on senior management, of course, and I guess Sir Howard Stringer is trying to fix the ship, but he's been in the job for about a year and the biggest thing he has to his name is the Great Flaming Battery Recall.

What has been your experience with Sony? Why have you stayed with the company, or left the company, in terms of its products?

What's your on-the-ground view of how Sony blew the 21st century? At least so far.

Today In The Post:

-- What's wrong with Sprint Nextel? Ask the nearly 200,000 customers who left last quarter. Or, just read Yuki Noguchi's story today.

-- Walls are one of mankind's earliest and most enduring technologies. They were our first line of defense against other cavemen and they remain modern man's first line of defense against talking about emotions. Yesterday, President Bush OK'd buidling 700 more miles of wall along the U.S.-Mexico border. Read an excellent story on the history of walls in today's Style section by my colleague and bud Joel Garreau.

Elsewhere:

-- CNet has started a blog called Crave, which focuses on the newest gadgets that you simply, absolutely MUST have.

By Frank Ahrens  |  October 27, 2006; 11:34 AM ET  | Category:  Frank Ahrens
Previous: Private blogging--an oxymoron? | Next: Lunchtime Briefing: Howard Stern In Your Bentley


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Comments

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Sony still offers quality TVs and camcorders but I feel most of their other products are outdone by other brands. Also, I always saw Sony as a brand that milked its reputation for all it was worth, rather than simply putting out the best products. I've had poor experiences with Sony audio products--from walkmen to discmen to home systems.

Posted by: C | October 27, 2006 11:41 AM

Sony's problem was getting into the business of creating content. Once they did that, the electronics division was hamstrung by trying to appease the content wing. This led to Sony MiniDisc players. Which I've seen exactly one person using. And MP3 players that didn't play MP3 files. Everything had to be transcoded to a proprietary Sony format. Let's not forget the cds they sold with rootkits.

Posted by: marksman | October 27, 2006 11:48 AM

I, too, have some Sony components, primarily a 27" tube TV, a 5 CD changer for my home and a 6 CD changer for my Camry. These products, from 9 (car changer) to 3 (TV) years old seem to be doing well. But I'm not so convinced that I need to go Sony when I buy any new home electronics. So many other companies are making quality products at cheaper prices that I don't feel the need to pony up additional dollars just because the Sony name is on it. Today, quality and price are the key selling features, not just name.

Case in point, I'm not convinced too many parents are going to shell out $500 for a Playstation 3, but the $250-300 range for a Nintendo Wii seems fairly reasonable.

Sony needs to come to a similar value/price point for them to continue to be a player.

Posted by: Dave Howard | October 27, 2006 12:16 PM

I think there are two different things going on here. First, Sony's prices and quality. Others have caught up as there's been less to innovate on in traditional products, like TVs, and quality differences have declined. That said, Sony may still be worth paying a premium for quality and design. Or not.

Second is the iPod revolution. It simply came from a different direction. Computers, not audio. most of Sony's innovation was outgrowth from audio/video equipment. But iPods were fundamentally an outgrowth from computers and people putting MP3s on computers. As recently as 5 years ago most people were burning CDs and playing them on sony CD players (or other CD players) Remember that iTunes started with rip. mix. burn.

To say sony got caught flatfooted is to ignore that so has the rest of the industry. iPods have 70%+ of hte market, so it's not just sony that missed it; it's been a fundamental shift that Apple has managed to capture, and has frozen out Sony and the rest.

Posted by: ah | October 27, 2006 12:40 PM

Wipe off the name "Sony" and there is no issue. During the Sony heydays they had a risk-taking, innovative, product oriented, autocratic founder/ceo. Now they changed from Sony to "Clony": 1984-style manikin clones. Dell, Sony, HP, what do they share? It's in the "O", as in overstock. Gotta go now, my nano needs a little update from my attention from my MacBook.
_____________
PS. Yesterday, my bluetooth keyboard failed on my nearly 3-year old iMac. Called Apple tech support. After 5 minutes tech decided to FedEx me new keyboard. Next, went to local Apple store to purchase usb keyboard. Told them WHY I'm purchasing. They rang me up & said, when new free FedExd replacement is up & running just return your purchase & we'll reverse charge on your plastic.

Posted by: Caesar | October 27, 2006 12:41 PM

It's too easy to let Sony off the hook on missing the iPod revolution. Since they owned a large portion of the market for portable music players, they should have been well-positioned to make a serious run at the MP3 market. Due to their overprotectiveness and short-sightedness, they completely dropped the ball.

In my opinion, one of Sony's key mistakes was to start thinking more like a content provider than a consumer product developer. They were so concerned about music piracy that they focused on crippled products like the mini-disc player instead of giving customers what they wanted. This head-in-the-sand approach failed miserably, and allowed the CD-copying and MP3 player market to develop without Sony.

Once the market for MP3 players became established, Apple was the first major company to try to bridge the gap between content providers who wanted more protection, and end-users who wanted less. Apple added enough protection to be able to woo the major labels to iTunes, and of course their hardware and software execution was superb (this is Apple we are talking about after all!). The demise of Napster came at a great time for Apple, which was perfectly positioned to take advantage of the desperation of the labels to find a revenue stream for online music.

I think that Sony was so caught up in trying to stop the tide that they failed to realize when the battle had essentially been lost.

Posted by: Steve P | October 27, 2006 1:07 PM

I don't do business with companies that break my devices (see: Sony rootkit debacle) or buy devices that don't work with common standard components (see: all of Sony's electronics). Their business is based on making sure you can't buy anything but Sony - and it's much easier to not buy Sony at all, when there are so many other choices out there. (Also: Blu-ray? Snee hee hee.)

Posted by: KT | October 27, 2006 1:29 PM

It may be hard to do, but I am done with Sony. I have dealt with their faulty computers, camcorders, monitors, and other devices and have determined they are no longer reliable. However, their part in shutting down liksang was the last nail in the coffin for me.

Posted by: Sam T | October 27, 2006 1:46 PM

Sony is dooming itself with it's arrogance and laziness. It expects that teenagers will rush out to buy it's new PS3, but priced it at $599! (Yes, they have a cheaper alternative, but nobody will want it, like Xbox 360's core version) And they will still be losing hundreds of dollars a system at that price because they insist upon including blu-ray in it. Sony has a sketchy history of new formats (Beta, Minidisc, UMD) and are setting themselves for failure here again. They have piled lie upon lie about the system's capabilities, functions, and how many would be available at launch. Meanwhile Microsoft has a year head start and is slowly lowerinf their loss in the games division. And Nintendo, which totally destroys Sony in the handheld market, is releasing a new system at less than half of the PS3's price, with innovative technology that Sony happens to have included themselves in a last minute controller redesign. I too loved Sony products, but the company has seemingly grown too big for it's britches. I'll take my iPod, my DS, my 360, my Wii, my Samsung HDTV, and my HD-DVD player and wait and see if Sony learns some humility.

Posted by: Matthew | October 27, 2006 2:12 PM

They lived on their name too long and stopped innovating. I have never bought any of their home electronics because I always thought they were overpriced and no better than other brands. I had a Discman back in the day but that was a long time ago. Digital music really did catch them flat-footed. They are still cranking out MiniDisc hardware and discs which seems very odd indeed. I think they built a bigger customer base for that product in Asia, but surely that market has moved on to mp3 by now as well.

I do have a VAIO laptop that I think is great though. Very light and portable with plenty of computer power and it has proven to be plenty durable.

My plasma TV is a Panasonic though I think the new generation of Sony Bravia Tvs is pretty spectacular. You do pay a premium though.

They made some bad decisions and got caught out. They make some really nice products but lots of others that aren't any better than their competitors yet they charge a premium still. And the incompatible formats for things like Memory Stick make you really shake your head. People have caught on that just because it says "Sony" on it doesn't mean it is of higher quality.

Posted by: Glenn | October 27, 2006 2:16 PM

I was a Sony loyalist too - everything Sony - home theatre components - TV's - all sorts of electronics.

Until I recently bought the new 60" SXRD projection TV for $5K. The TV was great for 11 months and then a "green blob effect" took over part of the screen.

I called Sony service and was told to twiddle with the hues/tones and whatnot - nothing worked (after hours trying) and I called again: "we don't have a fix for that - there's nothing we can do." I reminded them that my TV was still under warranty and still "sorry - nothing we can do."

After some internet research, I found (many) others with the same problem, some of whom had gotten their sets repaired by tenaciousness with Sony.

I called back Sony and pointed this out - specifically that it was a "light engine" issue. They agreed to have a tech look at it and gave me two locations in Sarasota to call. I called and both said they had severed their service agreements with Sony because of "issues" with Sony.

So, I called Sony again and "Sorry - we don't have service in that area." I reminded them that that wasn't my problem and after about an hour on the phone they agreed to call me back with the next closest service provider.

Well, 2 weeks passed and nothing. I called back and sure enough: "Sorry - your set is beyond the warranty date!" Another hour on the phone... but they wouldn't budge.

I suppose I should sue them - but I have better things to do. They have lost me forever... and I am a huge consumer of consumer electronics. Very bad management on Sony's part - I'm telling everyone I know.

Thanks for your article... no more Sony for me... ever...

Posted by: Frank B. | October 27, 2006 2:34 PM

Matthew hit on one of their biggest problems...their obsession with proprietary formats. Not only is it almost pathological, but not ONE of them has become standard. They want to be Microsoft in the 1990s, yet they were never positioned for it, and it's a bad idea anyway. I would NEVER buy a Sony digicam or MP3 player, even though I like my Sony DVD player. And the big-screen Sony TV I bought came with a Memory Stick slot...that never gets used.

Posted by: The Cosmic Avenger | October 27, 2006 3:23 PM

Before buying a cell phone, I looked at Consumer Reports and J.D. Power. The two "winners" were T-Mobile and Verizon. The other cellular providers were awful. I chose T-Mobile, because it was a much better value.

In the current ratings, I see that T-Mobile has pulled away from Verizon, in my area.

http://www.jdpower.com/telecom/ratings/wireless/service/results/index.asp?v1=West

Posted by: JohnJ | October 27, 2006 3:27 PM

I used to work for Sony a few years ago in their, semi-conductor business. Basically preparing microchips that they make and put into other brands as well as their own. So pretty much you can be buying a Panasonic TV or whatever brand etc, and the internal components powering the thing will be Sony, but of course other companies do the same thing. So I find it a little funny when people say they'll stop buying a certain brand, because odds are you probably have some part of that company you wouldn't buy from in the product from the company you would buy from. Being on the production end of things its very scary to see how things can go so bad and how the quality of the product can change so dramatically simply by altering product standards. Sony for the most part has decent equipment, but and I believe with all companies that the idea isn't so much quality anymore as it is quantity. To me it seems Sony got too busy pushing out what it had then making new quality items that people want, so when the Ipod came along, that had to be a punch to the face.

Posted by: ironhyde | October 27, 2006 3:52 PM

Sony still has the mentality to seek a monopoly! their drive is to force everyone to come to them with new age technology. The PC revolution beat them on the iPod, and Apple jumped on the wave to make the digital downloads portable. i too still have my sony TV, stereo, CD player, etc. all but the TV can be bought for a nice price.

Posted by: Anonymous | October 27, 2006 4:52 PM

Sony got Lik-Sang shut down, alienating young electronics users and gamers who ought to be an enormous portion of their userbase. Sony wants its customers to use *only* Sony. Sony intentionally cripples its products to restrict what customers can do with them and how. Sony includes *malware* with its products (rootkit anyone? sacrifice your computer to the Sony gods?). Sony is arrogant and out of touch. Sony wants a monopoly, Sony wants obedience, Sony wants suckers.

It is dangerous for a major portion of your userbase to feel this way. I am 24. We don't buy Sony. Why? Because we don't want our intelligence to be insulted.

I used to like the Vaio. These days the only Sony product I have is a $15 digital radio. I hope Blu-ray fails if only to convince Sony that it needs to change direction, and fast.

(It's too bad, because I like the Bravia, and their marketing department hit a home run with the fantastic, intelligent ads for the Bravia.)

Posted by: sony lost in the past | October 27, 2006 6:16 PM

You have to go back in history to find the answer. Sony grew to the size it is/was solely off the back of its visionary founders who made all the decisions and took all the accountability. When Morita passed on, he left behind a vacuum that has never been filled. Having worked there, I can tell you that there is no leadership at Sony and no one takes accountability for anything- why would you when all you have to do is not rock the boat, take no risks, challenge nothing, just keep doing what you've always done and over time you're going to rise automatically through the ranks anyway - especially if you happen to be Japanese. So Sony is full of risk adverse functionaries (thousands of them) who are sitting around waiting for someone else to come out with the "next big thing" in products and basking in past glories - no wonder they haven't come up with anything innovative in over a decade.

Howard Stringer doesnt have and never had a change of really changing anything on the electronics side of Sony, he is purely a figure-head. The real power sits in the multiple layers of incompetent functionaries who would rather die than see anything change.

All these "problems" you are seeing at Sony are just symptoms of a corrupted culture and until you hear of a massive purge of several thousand senior managers,and a drastic change in direction ala IBM, Sony will just continue lumbering along until its finally put out of its misery.

Posted by: jb | October 27, 2006 8:22 PM

I link SONY's falling fortunes to its production of the blasphemous film, The
DaVinci Code. I was very upset with this film and protested in one of the over 2,000 theater protests nationwide. Ever since then, Sony's fortunes have been going down, down, down.

Posted by: John | October 28, 2006 9:25 AM

The comments above share a common thread: dissapointment. Sony was a friend which gave us music and movies in our homes. Then they bought a record company and started thinking that they own everything. And then they bought enough politicians that the law now agrees with them. Unfortunately for them, the law doesn't buy content or content playing devices.

Sometimes I think the joke is really on the lobbyists and the companies that hire them. The politicians sell them monopolies that they absolutely cannot deliver.

Posted by: Paul Fisher | October 28, 2006 10:20 AM

I'm almost scared to buy a new computer or any gadget right now. Especially with everything blowing up or coming with viruses nowadays.

Posted by: ishakoor | October 30, 2006 1:50 PM

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