The last few years have not been kind to Japanese electronics vendors such as Sony, which has seen its grip on the market slip to competitors.
This came to a head recently when Sony announced it will lose US$6.4 billion this year and the company’s shares hit a 31-year low in Tokyo trading.
But what is the cause of Sony’s woes?
According to a recent article by the New York Times, titled How the Tech Parade Passed Sony By, it is due to the company having an “astonishing lack of ideas” and not making “any money” in years due to its complete lack of a “hit product.”
However, ask Sony and it will strongly disagree with the sentiment.
“We are not out of ideas and probably the opposite is true, where we’ve been accused of having too many ideas,” Sony A/NZ managing director, Carl Rose, said in an exclusive interview with ARN.
To back up his claim, Rose points to how Sony has been innovating with products such as the Personal 3D Viewer, where the user can immerse themselves in a 3D experience, as well as Digital Recording Binoculars that bring 3D video recording to the long distance viewing device.
“We’re returning focus to our business and the products we offer, while continuing to revolutionise the electronics industry,” he said.
Gartner electronics analyst, Paul O’Donovan, views the assumption that Sony has been struggling in recent years due to lack of ideas as “complete boulderdash” and “rubbish”.
“Sony has certainly had some ideas and they have continued to be innovative,” he said.
O’Donovan instead blamed Sony’s problems on “not innovating in the right area” or beingunable to put in enough money into R&D to push these new technologies forward.
“For example, they brought out OLED TVs a few years ago, but the yields weren’t very good and they didn’t persist with the technology to bring and push it to the market,” he said.
As for the accusation that Sony is not making money due the lack of a “hit product”, Rose doesn’t think this ws the case.
“We’ve actually had numerous hit products including our NEX range of E-mount cameras, which Time Magazine even declared its ‘product of the year,’” he said.
The success of the PlayStation hardware and software was also highlighted by both Rose and O’Donovan as an example of a hit product by Sony that has brought money into company.
However, Rose does concede that Sony has faced incredible adversity in recent years, including the earthquake and tsunami in Japan and the floods in Thailand last year, which all affected its bottom line.
O’Donovan also said the current PlayStation 3 console has “not been quite as successful” as Microsoft’s Xbox 360, which has not helped Sony’s current predicament.
The question remains though: If the root cause of the losses at Sony isn't a lack of ideas then what is?
Ostensibly, the answer probably lies in Sony's underperforming TV division that had had its sales eroded by cheaper offerings from Korean competitors and a sluggish TV market in general.
Despite Sony’s loses encompassing its global operation, the silver lining is that Sony in Australia is performing quite well compared to other markets, with Rose confirming to ARN that Sony A/NZ is “a profitable organisation”.