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May 10, 2012

Sayonara Sony

By Julie Griffin, Contributing Writer

Sony’s downhill spiral has been made glaringly obvious by the recent report of its $5.7 billion loss in the 2011 financial year— a “record loss,” according to numerous headlines. Unfortunately for Sony, there doesn’t seem to be any one area that if improved, will turn their ship around. Industry experts point to multiple issues that are causing Sony to sink.  In fact, Reuters (News - Alert) recently quoted an industry analyst as saying, “I’m just not that impressed by Sony smartphones.” Gizmodo offers Sony’s MP3 player as a metaphor for Sony’s failure. Further, The New York Times points out that “disruptive technology and unforeseen rivals” certainly hasn’t helped. And another source, in an attempt to be optimistic, reports that Sony is looking forward to its collaborative production of Smurfs 3.

A writer for Gizmodo articulated his view of Sony’s downhill spiral in the snarky fashion typical of Gizmodo’s gadget geeks. He expanded on the list that Sony offered the press for the company’s financial failures: earthquakes, floods and foreign exchange rates to include “a bloated and confusing catalog of products; a sucky online strategy; and mis-focused efforts on emerging technologies.” He adds, “Somehow, Sony is staying positive and predicts a profit in 2012. Really? By selling stuff like this? Yeah, right.”

The same Gizmodo critic used the MP3 player as a suitable metaphor for Sony’s failure in his article, "How it all went wrong". Sony never evolved their devices like Apple (News - Alert) evolved their iPods, despite having the resources to do so. The New York Times supports his claim that Sony's lack of technological evolution is fundamental reason for their misfortune in an article entitled, "How the tech parade passed Sony by".  In the article, Sony is reprimanded for failing, “to ride some of the biggest waves of technological innovation in recent decades,” referring to digitization and a shift away from software-based operations to online operations. Gizmodo states that "their online operation sucks."

Reuters details Sony’s shortcomings by interviewing a slew of industry analysts about the topic. Experts have not only criticized the smartphones that the company is optimistic about selling by the millions this year, but their TVs and handsets, as well. Sony’s new CEO, Kazou Hirai, has strategies that are predictably under severe scrutiny. Among Hirai’s strategies to turn things around this year are to cut 10,000 jobs, halve their losses over their existing TV components, and launch innovative lines of other electronic products, including TVs with organic light emitting displays, or OLED. And of course, cross their fingers that the yen rate works in their favor. 

Edited by Jamie Epstein
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