Can Sony Reinvent Itself?

Bruce Rayner, Contributing Editor, Enterprise Efficiency OEM | 4/13/2012 | 35 comments

Bruce Rayner
Japan’s major corporations will be reporting their 2012 fiscal results in the next few weeks, and the word on the street is that it’s not going to be pretty, especially for the top electronics OEMs. As a preview, Sony and Sharp both warned earlier this week that their losses for the year, which ended March 31, will exceed previous projections. On Thursday, Sony’s CFO said the company’s loss will total $6.5 billion, the worst in company history and more than double its previous estimate of $2.9 billion.

A couple of months ago, I blogged about the sorry state of Sony, Nintendo, NEC, and others after they reported massive losses for the quarter that ended December 31. All were hit hard by the Thai flooding in 2011 that disrupted the supply of key components, and a strong Yen that makes Japanese products more expensive in foreign markets has eroded overseas earnings. The Yen is currently at a near record high against the US dollar.

In recent years, Japan’s electronics sector seems to have lost its technological edge to foreign innovators such as Apple and Samsung and a slew of up-and-coming competitors from China. Adding to their business challenges is the general malaise the country is feeling as it deals with the aftermath of the March 11, 2011 earthquake and tsunami and the Fukushima nuclear disaster. There’s a dark cloud hovering over the country.

The question now is: What steps will these former electronics powerhouses take to turn their fortunes around? Whatever they are, they better be bold.

Sony’s new CEO Kuzio Hiria provided a glimpse Thursday into the company’s plans to return to profitability. Hiria took the helm from Howard Springer, Sony’s first (and perhaps last) foreign CEO, earlier this month. “The time for Sony to change is now,” he said at a news conference.

But rather than laying out a bold and visionary plan for a reinvention of the company, Hiria spoke mainly of tactics. This included a focus on three existing businesses -- smartphones and tablets, cameras and camcorders, and games -- and a move away from the company’s unprofitable TV business. In addition, he announced plans to invest in medical equipment and cut 10,000 jobs.

In recent years, Sony lost its lead in TVs to Korea’s Samsung, which invested heavily in state-of-the-art mass production of flat-panel screens to become the dominant player in the market. Sony capitulated and entered into a joint venture with the Korean powerhouse to manufacture LCD screens but ended up pulling the plug late last year as the plant was not competitive.

Now Sony is banking on the Xperia smartphone to bring it back to life. Hiria said the Xperia will be the new hub of a networked environment that connects to a host of Sony devices, including the Sony PlayStation, and provides access to Sony’s vast inventory of music, video, and game content.

That’s a tall order as Sony is currently an also-ran in the smartphone market and faces a crowded field of financially strong, highly innovative competitors including top-ranked Apple and Samsung, not to mention a slew of Chinese companies that are looking to capture a piece of the low-end smartphone market. It’s going to be an uphill battle, for sure.

Of course, Hiria’s announcement was just the first salvo aimed at calming the markets and laying out the long-term plan for bringing the company back to life. If it’s to succeed, Sony -- and indeed, all the other major Japanese electronics OEMs -- needs to deliver products that will wow the world, game-changers on par with the Walkman of the 1980s. They all need to reinvent themselves. And that’s a tall order.

View Comments: Newest First | Oldest First | Threaded View
<<   <   Page 2 / 4   >   >>
keveend   Can Sony Reinvent Itself?   4/20/2012 1:45:48 PM
Re: interesting
I know that this is off topic but is the number 4 thing superstitious? What do you mean by "quite unlucky if you ask me?"
catalyst   Can Sony Reinvent Itself?   4/17/2012 7:23:01 PM
Re: Beta vs VHS?
@David Wagner:

That said, in those comparisons above, my TV is a Samsung and my game console is an Xbox, so maybe you're on to something.

The only thing Sony in my home is the KV-34XBR910 and an even older Walkman. Even to this day this 34-inch CRT TV has the best video quality compared to the very best LCDs and plasmas.
catalyst   Can Sony Reinvent Itself?   4/17/2012 7:17:49 PM
Re: Beta vs VHS?

Still, the brand SONY carries a lot of residue value that gives them a buffer and some time to recapture their panache.

I agree. The value the Sony brand carries is residual. ;-)
catalyst   Can Sony Reinvent Itself?   4/17/2012 7:16:29 PM
Re: interesting

Is there any particular reason why number 4 is unlucky?

The number 4 is the same pronunciation as the Chinese character for death or "to die". Quite unlucky if you ask me.
LuFu   Can Sony Reinvent Itself?   4/17/2012 12:28:14 PM
Re: Beta vs VHS?
@catalyst - Can't disagree heartily about the state of SONY's product quality, mix, and innovation. Part of their problem stems from their business diversification in trying to develop content (Playstation gaming, music, movies/Columbia), telecom, hardware, computers, retail stores, and a bunch of low margin consumer electronic products. They definitely lost their edge. It didn't happen overnight but over time.

I'm also not optimistic about Hirai's plans to turn the company around, more uninspiring rhetoric from a beaten down company rather than a passion call charged with confidence. Still, the brand SONY carries a lot of residue value that gives them a buffer and some time to recapture their panache. Other companies have done it - Apple, IBM, GM, Xerox, Yahoo...wait a minute, those last two aren't good examples. Good luck Sony.
David Wagner   Can Sony Reinvent Itself?   4/17/2012 11:36:14 AM
Re: Beta vs VHS?
I don't know catalyst. In consumer products like TVs people usually think of either Samsung or Sony. In video games it is Xbox or Sony. Granted, they've struggled in the computer market and that colors our perceptions here, but I think they still have a strong brand in the consumer market.

That said, in those comparisons above, my TV is a Samsung and my game console is an Xbox, so maybe you're on to somehting.
keveend   Can Sony Reinvent Itself?   4/17/2012 8:59:52 AM
Re: Can Sony Reinvent Itself?
Plus like the article said, Sony products are quite expensive in foreign markets. I remember I was expecting to buy some electronic goods from Singapore when I went there last year. Sony bravia televisions are a lot expensive than other brands like Samsung, Philips, Panasonic etc. This discourages their customers. No wonder Sony is coming down.
keveend   Can Sony Reinvent Itself?   4/17/2012 7:55:32 AM
Re: interesting
Yes. I have noticed that too. Is there any particular reason why number 4 is unlucky? Is it only prevalent in Asian countries? While I was in Malaysia, I noticed that instead of number 4 in the elevator, number 3A was there. I was wondering why?
catalyst   Can Sony Reinvent Itself?   4/17/2012 12:06:50 AM
Re: Beta vs VHS?


True, it's the power of the brand that gives them any chance.

To me the Sony brand stands for very little: overpriced, low-quality, overly technical. Sony still manages to manufacture a few gems here and there, but it is the company's complete lack of expertise in software, UI/UX, etc. that make those incredible hardware boxes difficult to use, prone to failures, and expensive.

The question for them is identifying their next wave while dealing with the burden of residue products while fighting off competition from Korea and China companies.

This sounds to me there's an assumption that Sony is still at the top with Korean and Chinese companies clawing their way up. If that's true, that is no longer true. Korea's Samsung has already beaten Sony and it is Samsung that will be fighting off competition from Japan and China.

I do want Sony to reinvent itself, but I don't think the measures announced by Hirai is enough. And the focus is still hardware and not on the total experience.

catalyst   Can Sony Reinvent Itself?   4/16/2012 11:55:23 PM
Re: interesting

maybe PS4 will bring luck to Sony :)

Unfortunately the number 4 is an unlucky number... maybe PS5. :-)

<<   <   Page 2 / 4   >   >>

The blogs and comments posted on do not reflect the views of TechWeb,, or its sponsors., TechWeb, and its sponsors do not assume responsibility for any comments, claims, or opinions made by authors and bloggers. They are no substitute for your own research and should not be relied upon for trading or any other purpose.

More Blogs from Bruce Rayner
Bruce Rayner   7/20/2012   21 comments
Earlier this month we witnessed a little scuffle involving Apple that sheds light on perhaps the most important challenge the electronics industry faces: how to balance environmental ...
Bruce Rayner   7/13/2012   9 comments
The tectonic plates of global manufacturing are starting to shift -- and the consequences could be dramatic.
Bruce Rayner   6/29/2012   74 comments
There was a piece in today's New York Times about Google's domestic manufacturing experiment. Seems the company's Nexus Q, a just-released home media player, is not only being designed in ...
Bruce Rayner   6/15/2012   15 comments
When we think of global companies, we typically think of the Fortune 500. These are big companies with their names plastered on shiny office buildings in cities like Berlin, London, ...
Bruce Rayner   6/8/2012   3 comments
Last year, 2011, was a calamitous year for OEMs as weird weather wreaked havoc on their supply chains. Perhaps the worst climate-related catastrophe from a supply-chain standpoint was the ...
E2 IT Migration Zones
IT Migration Zone - UK
Why PowerShell Is Important
Reduce the Windows 8 Footprint for VDI
Rethinking Storage Management
IT Migration Zone - FR
SQL Server : 240 To de mémoire flash pour votre data warehouse
Quand Office vient booster les revenus Cloud et Android de Microsoft
Windows Phone : Nokia veut davantage d'applications (et les utilisateurs aussi)
IT Migration Zone - DE
Cloud Computing: Warum Unternehmen trotz NSA auf die „private“ Wolke setzen sollten
Cloud Computing bleibt Wachstumsmarkt – Windows Azure ist Vorreiter
Like Us on Facebook
Twitter Feed
Enterprise Efficiency Twitter Feed
Site Moderators Wanted
Enterprise Efficiency is looking for engaged readers to moderate the message boards on this site. Engage in high-IQ conversations with IT industry leaders; earn kudos and perks. Interested? E-mail:
A Video Case Study – Translational Genomics Research Institute
e2 OEM Video

On the Case
TGen IT: Where We're Going Next

7|11|12   |   08:12   |   10 comments

Now that TGen has broken new ground in genomic research by using Dell's storage, cloud, and high-performance computing solutions, the company discusses what will come next for it and for personalized medicine.
On the Case
Better Care Through Better Communications

6|6|12   |   02:24   |   11 comments

The achievements of the TGen/Dell project could improve how all people receive healthcare, because they are creating ways to improve end-to-end communication of medical data.
On the Case
TGen IT: Where We Are Now

5|15|12   |   06:58   |   6 comments

TGen is breaking new ground in genomic research by using Dell's storage, cloud, and high-performance computing solutions.
On the Case
TGen IT: Where We Were

4|27|12   |   06:45   |   10 comments

The Translational Genomics Research Institute wanted to save lives, but its efforts were hobbled by immense computing challenges related to collecting, processing, sharing, and storing enormous amounts of data.
On the Case
1,200% Faster

4|18|12   |   02:27   |   12 comments

Through their partnership, Dell and TGen have increased the speed of TGen’s medical research by 1,200 percent.
On the Case
IT May Improve Children's Chances of Survival

4|17|12   |   02:12   |   8 comments

IT is helping medical researchers reach breakthroughs in a way and pace never seen before.
On the Case
Medical Advances in the Cloud

4|10|12   |   1:25   |   5 comments

TGen and Dell are pushing the boundaries of computing, and harnessing the power of the cloud to improve healthcare.
On the Case
TGen: Living the Mission

4|9|12   |   2:25   |   3 comments

TGen's CIO puts the organizational mission at the heart of everything the IT staff does.
On the Case
TGen Speeding Up Biomedical Research to Save More Lives

4|5|12   |   1:59   |   6 comments

The Translational Genomics Research Institute is revamping its computing to improve speed, storage, and collaboration – and, most importantly, to save lives.
On the Case
Computing Power Helping to Save Children's Lives

3|28|12   |   2:13   |   3 comments

The Translational Genomics Institute’s partnership with Dell is enabling them to treat kids with neuroblastoma more quickly and save more lives.
Curtis Franklin Jr.
OEMs Change Roles

1|18|13   |   1:55   |   3 comments

OEMs can change markets – here's why IT should have a say in the decision.
Tom Nolle
The Enterprise Side of Amazon Fire

9|29|11   |   2:04   |   6 comments

Amazon Fire’s split-browser model hosts some of the GUI in the cloud, which could have a major impact on virtual desktop thinking.
Curtis Franklin Jr.
The OEM Relationship

9|13|11   |   02:02   |   1 comment

The growth of OEM relationships means that enterprise IT execs must pay closer attention to who's responsible for support and development.
Pablo Valerio
Can't Land on the Runway Behind You

8|15|11   |   1:36   |   1 comment

One lesson from aviation also applies to big IT projects: Give yourself plenty of leeway and have room to maneuver.
Ivan Schneider
Flecksequence Explained

7|28|11   |   2:46   |   3 comments

How to use the term in a sentence and, more importantly, how flecksequence can help manufacturers.
Sara Peters
E2 Has a New Look!

7|20|11   |   2:53   |   6 comments

E2's gotten a makeover. Take a tour through some of our new features.