What Happened to Sony?January 6, 2010 By Janet Pinkerton
During a November briefing of media and analysts at Sony headquarters in Tokyo, company chairman Howard Stringer promised greater integration of Sony content and hardware to drive the company’s growth.
To illustrate his point, Stringer showed the guests a diagram of a Sony Online Network, which was made up of a PlayStation Network and console; a Sony TV; a Reader; a Vaio PC; a cell phone; and vaguely drawn “new mobile products.” The network would support consumers in sharing and enjoying personal and premium content. For good measure, the company also predicted 20 percent worldwide market share of LCD TV units by March 2013.
But a corporate presentation does not translate to market reality. Over the last year, Sony’s crown jewel TV business has steadily lost market share to Samsung, Vizio and others. Independent Sony dealers have been clamoring for more product differentiation to separate Sony SKUs from the low-priced sets sold at Walmart and Costco. And Sony’s dream of integrating cross-category hardware and content into a unified consumer experience is barely realized beyond the PlayStation Network.
Dealers say Sony’s brand strength and consumer draw is still strong. But the company has slacked off in other areas, dealers and analysts said.
For example, several local and regional dealers complained that Sony’s 2009 TV line did not feature the level of innovation consumers wanted in premium products. Daniel Pidgeon, chairman and co-founder of Starpower Home Entertainment Systems in Dallas, echoed other dealers when he expressed disappointment that the line didn’t include a greater LED presence and stronger OLED push. The lack of innovation “left [Sony] a bit flat-footed in the marketplace,” he said.
Steve Caldero, COO of Ken Crane’s Home Entertainment in Los Angeles, said he was surprised that Sony fell behind the technology curve.
“Samsung, currently the number-one rank in TV, has done an incredible job with their engineering and go-to-market. There are certain LED models (specifically Samsung’s 55V8000) that I don’t think we’ve had in stock for 30 continuous days since they came out. We just can’t get enough of them.”
Dealers expect and want a Sony rebound. “Sony has incredible people assets. They are, at heart, innovators,” Pidgeon said. “Counting them out would be a big mistake.”
What do dealers want from Sony? “A product line that can be sold through our channel, that would offer innovative features at a premium price, at a reasonable profit level, that is not sold by mass merchants,” Pidgeon said. “We have not had that this year.”