Sony A Broken Brand With Little Upside
By: David Richards
November 1, 2009
COMMENT: As we predicted, Sony has made yet another billion dollar loss, with the Company struggling to not only make a profit but find direction in a brutal consumer electronics market, which is now dominated, by the likes of Apple and Samsung and new kids on the block like Google and Vizio who are now licensing their LED TV technology to Sony.
So what is the future for Sony, who is one of the most arrogant Companies on the block?
In the consumer space, Sony is doing a lousy job of competing in the flat panel TV market, portable music and PC market, the home theatre and digital camera and camcorder markets as well as the gaming market all markets where they are losing money according to their latest financial report.
Slashing costs, sacking people and moving to cheap third party manufacturers, is not the answer, nor will it help them, get back on top as a leading brand.
What is needed is innovation and new product's that their competitors don't have.
Five years ago Samsung was struggling to get traction in the consumer electronics market. They lacked the credibility that the Sony brand name delivered; they did not have products like Trinitron TV's, the Walkman or owned patents like Blu ray.
Last week reported $3.5 billion in profits for the quarter, and are #1 in the TV market in Australia and other markets around the world.
Apple, who were struggling to hold their own in the PC market In 2004, just after the iPod had been launched, made a profit of $106 million for the year, Vs the $1.67 Billion quarterly profit announced last week.
In 2004 Sony were starting to realise that they were in trouble, profits had slumped 96% to just $202 million, they were losing momentum to rivals who had been quicker to ride the digital boom, then the arrogance of the then Japanese management kicked in when the Company said that the iPod was a "passing fad".
Five years on it is Samsung and Apple who are delivering the big profits, even Panasonic who made a $5 billion loss last year have managed to turn their woes around, but not Sony.
Today Sony is fast becoming a "me to brand" and their actions in Australia, where they have initiated big price drops as opposed to years of price gouging off the strength of their brand is an indication that they have nothing left to fight their battles.