4/12/2012 4:31 PM EDT

Actually, my reaction to Sony's downward trend is, why was it so hyped up in the past? Not to offend anyone, but there is a type of consumer out there who is overly vulnerable to this thing called "brand loyalty." Eventually, even if it takes as long as the next generation of kids, people latch onto new loyalties.

The same people who swear(ed) allegiance to Sony are those who also swear by Toyota, Honda, and (do I dare?) Apple. There is and has been a world of choices out there, in some aspects way better than these icons, and yet the faithful never give the others a second thought. Brand loyalty is as fickle as fashion.

But I agree. Sony was slow to go to LCD TVs, even though it seemed kind of obvious that LCDs would reign, as soon as the price came down. And perhaps they should have been more proactive about introducing smarts into their iconic hand held toys like Walkmans?

4/12/2012 5:00 PM EDT

Bert22306, yes, why would anybody pledge such a loyalty just to one brand? I agree with that. And once it becomes fashionable, the market momentum takes over, and everyone -- both inside and outside the company -- starts believing in his own hype.

But I do see Sony's troubles are many folds.
In my opinion, Sony certainly had a lot of good ideas and the company never lacked the spirit of innovations.

That said,
1) Being tied to its own music business made it only harder, not easier, for Sony to strike a sweeping agreement with the record industry like Steve Jobs did for iPod.

2) Sony always understood the importance of the networked world of entertainment. And yet, pulling off a huge networked world of its own online gaming, music and video was a lot more than a single company could chew on. It looked great in the business plan, but I am not certain that keeping both content and hardware business together under one roof turned out to be successful strategy for Sony's business, after all. (Mind you, Samsung has none of those "content" components in their business.)

3) Having no winning flat-panel business is definitely costing Sony now. But considering the unfathomable investment needed to compete with Samsung, I am not even sure that Sony would have been even successful if the company stuck to "manufacturing."

4) Sony had its own e-book much sooner than anybody else...way before the market caught onto it. And yet, this was one instance, Sony did not benefit from the first mover advantage -- largely because of the lack of infrastructure (to buy e-books!).

4/12/2012 5:15 PM EDT

Junko, you hit on one major area -- TV sets -- where Sony really dropped the ball. In the Trinitron days, and even earlier, the Sony brand was perceived by millions of U.S. consumers, rightly or wrongly, as the best TV picture money could buy. Sure, you paid more for a Sony -- paid extra for the brand name, some might say -- but that didn't matter if you just had to have the best.

Back in the early years of the transition to HDTV, at the start of this new millenium, I marveled at how much money Samsung was investing in its HDTV business, despite the market being slow to develop and ROI being years away. It was clear they were gunning for the #1 spot in brand perception, if not in sales to match.

Samsung's bet paid off. In the old days of analog TV, what U.S. consumer ever even heard of Samsung, at least in the context of TV sets? Today, when someone is shopping for a new HDTV set, their friends tell them "buy the Samsung. It might cost you more, but it has the best picture."

At least in the TV business, Samsung out-Japanesed the Japanese.

Another area that hit Sony hard was the transition from CD music to MP3s and the demise of the whole Walkman business, but that's a story for another time and place.

I still think Sony makes THE best camcorders and some of the best digital still cameras. Yes, those are declining markets, but when you're #1 or #2 at something, maybe you should look at how you can add new excitement to those businesses.

4/12/2012 5:35 PM EDT

Here's a for example. Sony does indeed make some nice digital cameras. They have 24 X 36mm sensors, which promise very sharp images, and a very nice line of Carl Zeiss lenses. Nothing to dispute there. Although a lot of people, me too I confess, end up using the comparatively awful camera built into my cell phone often, these days. (Blush.)

But I'm old enough to remember the early Sony Trinitron tubes, the hype they got, and the following of loyalists. Was I so impressed? Not really. The contrast wasn't enough for my taste, the contrast was made even worse if you used that auto-flesh-tone adjustment button, and the reds were not as fabulous as RCA's, of that time.

So in other words, I guess I'm saying, some of the loyal following doesn't make a lot of sense, and never has. People would swear by anything Sony, even the unremarkable stuff, like they owned something amazing. It's no wonder that this sort of attitude changes over time. It's almost like one has to expect it. What's the saying? The harder they rise, the harder they fall?

4/13/2012 8:54 AM EDT

In my opinion the key fact of today's consumers is that they are no more Brand Loyalists. They will buy what they find as best today- money wise-performance wise or utility wise.

The Korean companies both LG and Samsung have consistently offered products competitive in price and performance making people forget the brand Sony.

4/13/2012 11:28 AM EDT

As Yoshida-san documented in her reporting from South Korea, Samsung beat Sony and the rest of "Japan Inc." at their own game. I recommend to anyone who hasn't read it, Junko's interview with Samsung's Jong Yong Yun and her analysis of how the Korean powerhouse operates.

Howard Stringer's appointment as CEO seems to have been another fatal misstep by Sony. Bringing in a "media guy" did nothing to reverse Sony's fortunes, and Stringer simply lacked the desire to understand the culture in which he was working and the imagination to turn Sony around.

4/13/2012 12:02 PM EDT

The Sony name still commands respect, in my opinion, and I wouldn't underrate their ability to restore their full prowess. However, if they decide they must all be software experts instead of manufacturers, I doubt they will like the results. After seeing how devastating and ineffective the adoption of "the global economy" has been to the achievement of human potential, I think national and cultural measures to protect some portion of local manufacturing capability and some portion of local markets make sense. The economic arguments for elimination of all barriers to trade, in order to supposedly maximize global economic efficiency, completely ignore such a myriad of other vital factors that they are almost useless, in my view. Only economic factors are presumed important in that universe. But, if a society that treats workers poorly has unfettered trade with a society that treats them better, the society that treats them poorly will have an economic advantage. In a completely open market, the society that treats workers well can no longer do so. (Continued in next post.)

4/13/2012 4:29 PM EDT

20 years ago we would have never thought that Microsoft would beat Sony in videogame consoles. (We laughed at M'soft getting into consoles!) And we never would have dreamed Apple would beat Sony in portable audio.

Indeed the aura of a company with deep consumer product sense and sophistication is at Apple now. That was once Sony's turf.

There's a book here, and Junko, I think you should write it!

4/13/2012 5:44 PM EDT

Consumer brands do com and go. Consumers are finicky. Nothing is eternal. But the more I think about this Sony saga (and thinking about Nokia's downfall), the more convinced I am that the problem may lie in the breadth of the business Sony is engaged in. The company is spread way too thin to bring focus to their business.

4/15/2012 9:21 AM EDT

One of the prime reason Sony missed opportunity was flat panel display. Perhaps that was most significant decision they should have made. There is always better way. Sony still has opportunity to do innovation in flat panel display and recapture past glory. I love Sony.

4/15/2012 3:09 PM EDT

You could almost replace the name "Sony" in your article with "Kodak", "General Motors", "Polaroid", "Zenith" or any of a host of others. It seems far too easy for the top-dog to lose itself and fall. Of course, the same happens with lower tier players but we just never hear of them.

The reason we hear about Sony and other top-tier companies in trouble is the brand. A lot of people talk about brand loyalty being fickle. I disagree. It's brand loyalty that allows companies like GM, Sony, Apple and RCA to last long past the point at which their products should have taken them under. In the case of Apple, the brand loyalty to the Apple II kept them alive through a string of barely functional products. The Apple III was a bust as was the Lisa. The first Macs were revolutionary but barely functional.

GM put out a string of very poor quality cars in the 80's and 90's. If brand loyalty was fickle, they would have died or become "Government Motors" back then. The brand "Sony" is why Sony is still with us at all. If Sony re-emerges as a strong company, it will be because the brand allowed it to fight through the difficult times - because brand loyalty gave them enough time to fix their troubles.

Still, there are limits to how long a brand can keep a poorly performing company alive or in the top tier.

4/15/2012 5:23 PM EDT

Compared to Sony, Samsung is invading the home appliances' market - TV set, refrigerator, microwave oven, you name it. Is Samsung not focused on enough?

Sony succeeds in penetrating blu-ray into the media market, kicking HD DVD out is a proof of having record company and production company be part of Sony. These companies might keep Sony from going after MP3 market. Yet, it helped them in 2007.

The lack of games at first launch and the difficulty of gaming development for PS3 might be the greatest obstacle to the market penetration of PS3.

Another biggest factor is the launching of Wii around the time when PS3 was launched. Wii brought a new gaming experience that PS3 failed to deliver. Although Move helps Sony to level the playground with Wii (at least in hardware point of view), X360 jumped ahead. This particular story tells me one thing. If you are just focused on what your competitors have and what you don't have, you are making yourself a follower. Microsoft, in this instance, plays a better game. Could Microsoft deliver Kinect with very low investment? I am sure Microsoft has been investing into machine vision and gesture recognition long before Kinect was launched. Bill Gates had the vision back in 2007 in All Things Digital.

To regain its status symbol, Sony has to acknowledge the reality and starts the proper actions. The recent act and restructuring of Sony is a proof of such acknowledgment. It is hard for me to believe a company as big as Sony will fall through the crack. Rather, I believe Sony will transform if the leaders of Sony are able to leverage the assets that have been build for years.

4/16/2012 6:42 AM EDT

again, i can cite Stev Jobs, that the top guy has to have a passion for his product! It seems to me that the top managers of SONY lately were not this type of people! If wrong people run a huge company like SONY without any passion to their products (musik, TV etc) and no visible product roadmap, then one should not wonder why it goes broke!

4/16/2012 2:32 PM EDT

In an interview I did in the late 1980s with an Apple employee, who had been around since Apple's founding in the late 1970s, I asked what were Apple's goals as a company. His answer was that it wanted to have the brand awareness and product cachet of Sony--then being led by its charismatic founder Akio Morita. Sony was basking in the fame of the Walkman, but in audio-video production, as well as in home electronics, Sony was the best of the best and the thought leaders knew it. Apple achieved its vision and somewhere along the way Sony lost its own. For Sony to recapture its former glory it will need another Morita-san to take the helm of this sprawling giant, synthesize its strengths and attack the market with a clear understanding of where it's going. It remains to be seen if Hirai-san is the man for the job.

4/16/2012 4:51 PM EDT

You underestimate the damage done by the DRM issues. Young people avoid Sony because of the association with locked-down media devices and other heavy handed business practices.

Also, I was put off the Sony brand when my friend showed me his 5GByte mini-disk player (remember those?) that he bought in Tokyo. I bought one for my daughter, only to learn that the feature I/she most desired was only available in the Japanese market, not in the U.S. Consequently she had no use for it, and it was the last time Sony got any of my money.

4/17/2012 5:34 PM EDT

In the pro- and semi-pro audio-video business, Sony always operated heavy-handed restrictive business practices, made possible by the long queue of dealers wanting to get SONY on board. SONY's control of selling prices made sure everyone got a good margin, so dealers all had a slush-fund with which to buy business from corporate and educational bulk buyers with backhanders like loans, holidays, exotic entertainment(!), sweeteners of all kinds.

It wasn't the technical specs that won the day (although SONY gear was adequate, it wasn't often cutting edge), it was the under-the-table dealing that secured SONY's market position.

Competitors had to match the backhanders and sweeteners or go empty handed, and many refused to go that low, preferring a straight fight on technical performance alone. This was a different world to the consumer market, where there are too many to bribe but if you can control fashion you can get a huge advantage.

Certainly SONY were not alone in these practices but to see them at the top, made the contrast with the reality of their inside operations all the more glaring and hypocritical.

I wondered if SONY decided to adopt these strong-arm tactics after themselves losing the BetaMax straight fight with a better product. They certainly won with BetaCam after that!

4/18/2012 10:10 AM EDT

I would not bet against Sony, just yet. The loyalty of Japanese customers is a positive thing in my opinion as it gives them a breather for when things go wrong (something other companies in other countries do not have, which means they have very little breathing space). I also admire the manufacturing culture in Japan, for when manufacturing skills are lost, it is very hard if not impossible to recover. I agree that Sony have been slow in bringing new innovative products to the market in the last decade or so but I reckon they will bounce back soon.

4/20/2012 3:55 PM EDT

It seems to me that companies often lose sight of their customers. They have 1) stockholders 2) boards of directors 3)media (in this case electronic and computer magazine writers, reviewers, etc...
I often think that CES (which has consumer(s) in the name, but not actually attending the show as the attendees are all pundits.
When was the last time a big company actually got a few engineers together and went out and ask some consumers/customers "how do you like this ?"

4/20/2012 4:57 PM EDT

I lost confidence in Sony as a result of buying my first DVD player from them. I eventually found that it would not play any CD or DVD that wasn't mastered. I'm sure that was the desire of the the content folks at Sony, there surely was no technical reason for the limitation. So not only could a not play content that I made myself, I also could not play other low-volume (non-mastered) content like my daughter's high school orchestra. That was the end of the line for Sony products in my house.

If Sony can improve the user experience, they might win me back, but I think that it is unlikely unless they separate themselves from the content folks. There is a lot of room to make the consumer electronics experience a lot better, but an agenda of anything other than pleasing the customer will prevent it from happening.