If you dont ask her to dance, someone else will...
A very simple story….
(this should not take you longer than 5 minutes (+/- 20 seconds) to read, if it does, please do include that in your comments)
In 1998, if you had asked me who would lead the future of consumer electronics, I would have said Sony. It had the highest amount of equity for high quality, innovative electronic goods. It had dethroned Nintendo by entering the video games market (and was on the verge of making the market unpalatable for the legendary Sega) and was becoming quite the force in the music industry.
Around the same time, Sony was very well invested in the Movie business. The Sony Entertainment division was becoming almost as much of a strategic engine as consumer electronics.
Today, in 2006, Sony is no longer the largest in terms of sales, (Samsung having a net edge) a position it has enjoyed for well over a decade. And there is a new player in town that has the markets of the future securely in its grasp: Apple.
Apple is not a new name. But in 1998 Apple meant Home computers, and to a certain extent, laptops. Today, Apple leads the way when it comes to potable music, portable internet content, and is the surprise wild child of this new world.
The portable data devices market (which is the umbrella for portable Mp3 music) is basically IPod. And now, its becoming a content carrier and provider. ITunes will get you Madonna’s latest for 3 odd dollars cheaper than HMV. And now, with IPod video, a similar year can be predicted for Movies and videos.
So where is Sony? Why am I not looking at a Sony Walkman dominated world. Why did an innovation that defined portable music (and is as old as I am) take so long to come back again and deal with the Mp3 format? It was released in 2005, it’s almost like waiting for your favorite band to come out with their next album, only to find that it came out too late, and that it did not sound all that nice.
As a loyal Sony fan, I still went ahead and bought the Sony Walkman, perhaps because it was born the same year as me, I feel some strange sense of association with the brand. But it stands as only a distant second to the IPod. And Sony is late in another market: online content.
I am now boring even myself, so I will cut to the chase. The explanation is very simple, it usually always is when one player loses the market, despite its dominance in the integrated technologies: It is Sony’s domination (and high stakes) in integrated technologies and revenue streams. Sony owns the copyrights to much of the content that Apple intends to provide its consumers. If there is one advantage Apple had over Sony in 1998, it is that Apple was a player in all of the platforms that Sony can provide (except video games consoles) but had no strands in the music or movie industry. Sony did. In a very big and growing way. And this stake, made the giant hesitate. It was ideally placed to give Mp3 shufflers on most kind of music devices. It could have given me my Walkman 3 years ago. But got the jitters because all the money it would lose from music and video sales to the the millions getting it for free to put into their IPods.
And that’s where I feel they were led astray. Not only did it lose the feared millions in intellectual property sales, but also has to play second fiddle (at least for now, the Walkman is cheaper and in a slightly deviated segment). Instead of integrating an elegant awe inspiring array of products, it faltered. The genius of Jobs took the initiative, and now is smiling from ear to ear.
I conclude by declaring that Sony need not divest, but it needs to take some heart and face Apple face to face, its Mp3 Player should beat it in style, something they are most capable of. And it still makes the ‘best-in-show’ for portable media content. The core dynamics of the Mobile phone segment can easily be migrated onto something that will give any IPod a run for its money (reference to ITunes).
Yet we still find a hesitant Sony. Lead-time is too long. It still holds on to intellectual property like an over-protective parent. (The PSP only supports a Sony MD, and a digital lock it puts on CDs originating from Sony Music has landed it into trouble). Sony retains most of its brand equity for quality TVs, DVD players, Music systems and game consoles. But much of its core technology can be provided for less money by Samsung, which now has virtually become a symbol of Plasma stand alone TVs in the media, and is growing faster than Sony in most of the above segments. And these are saturated markets of long standing. The one market where it continues to dominate is Video game consoles, and we have to keep in mind this market is very much defined by Sony's relationship with publishers. The X-Box 360 is an impressive engine, and expect Electronic Arts, Sega Games et al to take it far more seriously.
For millions, as we browse through FutureShop, if we can afford it, we buy a Sony. But we wont be coming back to buy our music or movies, and wireless broad-band means I can get Season 5 of the Sopranos on my laptop for 20 odd dollars, without even reaching for my Sony remote, ignoring the TV in favour of my computer, something called an Apple. And as they move in as kings, they are making themselves very hot, and very desirable. The blonde goes to Steve Jobs, because he asked her to dance. Apple now has entertainment units to match, and a 17" widescreen is not a bad alternative to a 40" one if it allows me to download and watch Tony and the family. Apple Large screen TVs are somewhat highprice considering the alternates, but Apple is quite the integration wizard. Its rise to power is just as elegant as Sony's was in the early to late 70's.
(the need for factual support is replaced by the need for gut-guesstimating and a deep down kinda feeling that tells me that most of what I say is right)
(this should not take you longer than 5 minutes (+/- 20 seconds) to read, if it does, please do include that in your comments)
In 1998, if you had asked me who would lead the future of consumer electronics, I would have said Sony. It had the highest amount of equity for high quality, innovative electronic goods. It had dethroned Nintendo by entering the video games market (and was on the verge of making the market unpalatable for the legendary Sega) and was becoming quite the force in the music industry.
Around the same time, Sony was very well invested in the Movie business. The Sony Entertainment division was becoming almost as much of a strategic engine as consumer electronics.
Today, in 2006, Sony is no longer the largest in terms of sales, (Samsung having a net edge) a position it has enjoyed for well over a decade. And there is a new player in town that has the markets of the future securely in its grasp: Apple.
Apple is not a new name. But in 1998 Apple meant Home computers, and to a certain extent, laptops. Today, Apple leads the way when it comes to potable music, portable internet content, and is the surprise wild child of this new world.
The portable data devices market (which is the umbrella for portable Mp3 music) is basically IPod. And now, its becoming a content carrier and provider. ITunes will get you Madonna’s latest for 3 odd dollars cheaper than HMV. And now, with IPod video, a similar year can be predicted for Movies and videos.
So where is Sony? Why am I not looking at a Sony Walkman dominated world. Why did an innovation that defined portable music (and is as old as I am) take so long to come back again and deal with the Mp3 format? It was released in 2005, it’s almost like waiting for your favorite band to come out with their next album, only to find that it came out too late, and that it did not sound all that nice.
As a loyal Sony fan, I still went ahead and bought the Sony Walkman, perhaps because it was born the same year as me, I feel some strange sense of association with the brand. But it stands as only a distant second to the IPod. And Sony is late in another market: online content.
I am now boring even myself, so I will cut to the chase. The explanation is very simple, it usually always is when one player loses the market, despite its dominance in the integrated technologies: It is Sony’s domination (and high stakes) in integrated technologies and revenue streams. Sony owns the copyrights to much of the content that Apple intends to provide its consumers. If there is one advantage Apple had over Sony in 1998, it is that Apple was a player in all of the platforms that Sony can provide (except video games consoles) but had no strands in the music or movie industry. Sony did. In a very big and growing way. And this stake, made the giant hesitate. It was ideally placed to give Mp3 shufflers on most kind of music devices. It could have given me my Walkman 3 years ago. But got the jitters because all the money it would lose from music and video sales to the the millions getting it for free to put into their IPods.
And that’s where I feel they were led astray. Not only did it lose the feared millions in intellectual property sales, but also has to play second fiddle (at least for now, the Walkman is cheaper and in a slightly deviated segment). Instead of integrating an elegant awe inspiring array of products, it faltered. The genius of Jobs took the initiative, and now is smiling from ear to ear.
I conclude by declaring that Sony need not divest, but it needs to take some heart and face Apple face to face, its Mp3 Player should beat it in style, something they are most capable of. And it still makes the ‘best-in-show’ for portable media content. The core dynamics of the Mobile phone segment can easily be migrated onto something that will give any IPod a run for its money (reference to ITunes).
Yet we still find a hesitant Sony. Lead-time is too long. It still holds on to intellectual property like an over-protective parent. (The PSP only supports a Sony MD, and a digital lock it puts on CDs originating from Sony Music has landed it into trouble). Sony retains most of its brand equity for quality TVs, DVD players, Music systems and game consoles. But much of its core technology can be provided for less money by Samsung, which now has virtually become a symbol of Plasma stand alone TVs in the media, and is growing faster than Sony in most of the above segments. And these are saturated markets of long standing. The one market where it continues to dominate is Video game consoles, and we have to keep in mind this market is very much defined by Sony's relationship with publishers. The X-Box 360 is an impressive engine, and expect Electronic Arts, Sega Games et al to take it far more seriously.
For millions, as we browse through FutureShop, if we can afford it, we buy a Sony. But we wont be coming back to buy our music or movies, and wireless broad-band means I can get Season 5 of the Sopranos on my laptop for 20 odd dollars, without even reaching for my Sony remote, ignoring the TV in favour of my computer, something called an Apple. And as they move in as kings, they are making themselves very hot, and very desirable. The blonde goes to Steve Jobs, because he asked her to dance. Apple now has entertainment units to match, and a 17" widescreen is not a bad alternative to a 40" one if it allows me to download and watch Tony and the family. Apple Large screen TVs are somewhat highprice considering the alternates, but Apple is quite the integration wizard. Its rise to power is just as elegant as Sony's was in the early to late 70's.
(the need for factual support is replaced by the need for gut-guesstimating and a deep down kinda feeling that tells me that most of what I say is right)
posted by Unknown at 6:20 PM
3 Comments:
I have made one oversight: Apple did have some strands in Movies, Pixar Animation (Toy Story et al.). But paltry (especially in 1998) compared to Sony Pictures. Sony Pictures also owns MGM as part of the stake it has in Hollywood (among others).
Actually, I was not suggesting that Sony divest, pull the rug, but that it continue its current strategy of placing a cheaper alternative to the ipod. However, i need current sales figues to continue down that thread. Sony must have an alternate position to the integrated solution that is itunes. Not likely anytime soon.
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