You hit the nail on the head. Contemporary management usually looks for the path of least resistance when it comes to "improving" the bottom line and making themselves look better. The easiest way to guarantee an instant improvement in the numbers is to simply fire people. It's not exactly the type of decision that warrants someone being paid millions to make.
This is bad reasoning.
The action described is almost the first thing the new CEO has done. Whether they are a good CEO or a bad CEO remains to be seen but this same decision would be made regardless.
It's the first action of a bad CEO as you imply, but a good CEO would also make the same first move so it proves nothing.
I agree. Corporate structure dictates cost cutting and design-by-consensus. The personal clout of Steve was the only reason Apple was able to build the iPad or iPhone. Both of which were, according to market journalists at the time, stupid products.
Apple won't be producing things so innovative that they appear "stupid" to the marketplace and then suddenly rocket up to 10s of millions of sales.
Reminder, this was in 2010 when the iPad required Steve's personal clout in order to launch. Apple today is just a corporation. Its job will be to maintain what it has against innovative newcomers.
You're making some fairly wide, sweeping assumptions here. How about we wait for Apple to actually start to decline before we describe it as a fait accompli?
I remember when the Sony brand meant quality! Now I will only buy electronic gear if it's made by Apple... Gone 3 years without a TV... And really miss it. But Ill wait for Apple's new tv this fall.
No thanks, rim, dell, hp, Sony, Htc, MS, google, Motorola, Nokia, etc. U can keep ur plasticky hardware, running crappy software.
Fire 10,000 people on $30,000 per year = $300m saving ...
assuming that totally arbitrary number you threw out there (i.e., 30K), includes other costs aside from salary.
Quote:
They are still making a loss in the Playstation sector - last year, they had a loss of $1b in one quarter.
what you are referring to is the Consumer Products & Services division of Sony, not the PlayStation sector.
the Consumer Products & Services division includes television, home video, home audio, digital imaging, PC, gaming (the PlayStation brand), and mobile products, along with networked services. the PlayStation brand is profitatable; what's taking a huge hit is some of the other members of Consumer Products & Services
Quote:
They could even republish a lot of PS2 titles and make an absolute killing in software sales for next to no effort.
first, Sony has republished several key PS2 franchises and will continue to do so. and, second, it's not a 'no effort' task to port those titles to the Vita or PS3.
Quote:
I wonder how many billions they can lose before bankruptcy. If they were a bank with private gain and public loss ...
Sony does provide a banking services in the form of http://www.sonyfh.co.jp/web/index_en.html founded in 2004, Sony Financial Holdings Inc owns and oversees the operation of Sony Life Insurance, Sony Assurance, Sony Bank, Sony Bank Securities and Sony Life Insurance (Philippines).
Sony is getting crushed between Samsung and Apple (and for gaming, also MS and Nintendo).
Samsung is taking all its commodity hardware markets away - HDTV's, phones, etc. while Apple is taking its premium hardware markets away, plus the vital services ecosystem for them - iTunes and the rest.
in theory Sony had the same potential for a hardware-based business model that Apple has succeeded with so dramatically. add them all together, plus Sony's media and games, and you certainly have the makings for a real ecosystem.
but it never had its own consumer software. this was the fatal flaw. just a lot of hardware firmware with crude UI's you hated to use. it relied on Windows and now Android for higher level applications and never developed any of its own that are excellent or even noteworthy. mainly Sony just tries to milk - "monetize" - whatever it's got now to generate revenues, but few, except for dedicated gamers, want to pay them for anything.
i see no hope. it's just too late now for Sony to build the in-house software competency it desperately needs and then deploy it. that would take years.
i see the big break-up coming in 2014 after a terrible 2013 financially. the mediaco part will be broken off and sold to one of the other three mediaco giants to generate billions of life-saving cash, and the remaining hardware part will "merge" with one of the other fading Japanese tech giants.
then the Sony brand will live on, in name at least.
Once you get as big as Sony you just start to make crap so people will buy your sh** again. And again.
Same thing will happen to Apple. Just give it time and all them iPhones and mac will b as disposable was those cheap a$$ printers by HP.
Correction: the same thing DID happen to Apple, it nearly went bankrupt. But you can be forgiven for thinking Apple will soon forget the lessons it learned during the second coming of Steve.
You're making some fairly wide, sweeping assumptions here. How about we wait for Apple to actually start to decline before we describe it as a fait accompli?
You are right to say that. We don't know. But, I do not understand the suggestion that Apple is definitely "innovative" and its track record should be expected to continue steadily. Steve personally commissioned all of Apple's current signature products. It is the tech business. In 5 years, Apple's current products will be irrelevant. ExxonMobil's product line will be very relevant in 2017. Apple now is valued like a sustainable pillar of global business. But sony wasn't sustainable. Obviously it is a cautionary tale for AAPL and calls the conventional wisdom into question. I own some AAPL but sold most already.
One of our family friends was in a secret R&D startup-style division of Sony. They were working on their own operating system for an iPod Touch style device which was in Alpha. According to our friend the device was impressive as they made excellent inroads to creating an integrated Sony ecosystem as well.
Rather than trying to continue innovating Sony canned the entire team. Truly a shame. Sony has gone from the best products in the 1980s to the same "me-too" derivative garbage everyone else is selling. Sony is trying to sell specifications rather than customer service, design and price-for-performance. Sony is a premium brand that lacks brand value or even a better value proposition.
Sony, Panasonic, et al could learn a lesson from Apple: too much choice is just confusing for the customer and must make it difficult to gain economies of scale in the manufacturing process. I've bought a lot of Sony kit over the years and it's always been good quality and very reliable but it's very depressing walking into my local Sony Centre these days. The staff all look bored and there's just too much crap. Compare that to the simplicity of the Apple Stores. If you read one of Sony?s product catalogues it?s just amazing how many products they make.
Samsung also makes a lot of products. But Samsung is just taking market share from Sony.
I once walked into a Sony Store and pointed out to them that one of their $1,500 laptops with windows 7 starter couldn't run the windows AERO interface. The sales rep and I quote told me, "You dont need AREO to enjoy the benefits of window 7."
Good luck to them personally I think they are screwed...
Samsung also makes a lot of products. But Samsung is just taking market share from Sony.
Sad, but true. On a larger scale, Sony represents much of the Japanese industry in general. They're in denial and always pining away at the memories of their old glory days. That's why I smh every time I hear about a Japanese company trying to repeat successes of the past or take a page from Samsung's book, which turns out to be a huge mistake years later. Like Sharp investing billions of dollars in a 10th generation plant in Sakai, only to 3 years later require a de facto bailout from Foxconn to even make that factory even worth using. Or Elpida basically relying on tariffs to block foreign imports of DRAM because they can't sell their own without help. Look at them now--they're bankrupt!
Sony made quite a few mistakes, and others here are right that they always had the potential of creating their own ecosystem. Software expertise is one area they should've explored years ago. They also have a lot of content they could've experimented with integrating into their devices.
All I can say is farewell, Sony. Your Walkman mp3 players were always my favorites with the acclaimed SQ and easy to use UI. Even the bought your A818 years ago, loved it until it got stolen. Used an S639 it until it died, and now am rocking the E354. I'll be sad to see these go if Sony goes down under.
Correction: the same thing DID happen to Apple, it nearly went bankrupt. But you can be forgiven for thinking Apple will soon forget the lessons it learned during the second coming of Steve.
I used to buy my company's laptops and we had a consultant who did day-to-day repairs. He told me that he had a customer with a Sony laptop that needed a new keyboard, and he discovered that Sony don't supply spares. One's only option is to send the unit back to Sony for repair. The customer did that and the laptop was away for 3 weeks and when it was returned the postmarks showed that it had been to Belgium and France (I'm in the UK). The OS had been reinstalled like new and the customer had lost all his setup and data. My consultant would have ordered a keyboard, contacted the customer when it arrived and fitted it in 24 hours - if he could have bought a keyboard. After I heard that I had a friend with a Sony laptop whose keyboard 'F' key had come off. I told her that spares are unobtainable. She contacted her regular IT guy, who looked on Ebay for a keyboard and even found one offered with the 'F' key missing! She ended up using her lovely white Sony laptop with an external PS2 keyboard.
On both the Sony laptops I've known the letters on some of the keys have rubbed off with wear, so one needs touch-typing skills to use them.
I think a manufacturer of laptops who can't even design a keyboard that's fit for purpose should seriously consider another line of business.
"The division is under heavy pressure to deliver better numbers with the release of the PlayStation Vita, which has not only failed to meet sales expectations in Japan, but contributed to major losses for the company."
1.5m units per quarter is dire. Even assuming growth internationally, it means there will only be a user-base of 10m tops by the end of the year. Apple sold 37 million iPhones last quarter.
I personally think Sony makes better hardware than Nintendo and Microsoft but a Playstation just sits in the corner and it really doesn't offer a better gaming experience than a 360, especially with XBox Live.
I think the Vita is a great piece of hardware but it needs great games and lots of them to justify investing in the product. Apple's App Store is great for this because if you buy a new phone, you still get all the software and you can start right where you left off and publishers immediately get a huge user-base to work with.
I don't think they should scrap the Playstation, just the portable hardware division and go software-only for phones. Apple is suffering here too. Their iPod Touches sell 7 million per quarter vs 37 million iPhones. The writing is on the wall, people don't want limited-function mobile devices any more. Nobody is making more pockets.
iPhone = GPS + internet + games + camera + apps + phone
The danger with companies is they get run for the employee's benefit not the shareholders (who are widows and orphans trying to pay for their mortgage too, in many cases).
That may be the most absurd statement I've ever seen posted on this site. No corporation that I think of was ever run for the employees' benefit. I can think of a few that were run for the senior executives' benefit (Enron, etc.), but never for the employees. And "widows and orphans" tend to have their pensions and other investments in mutual funds, not in single stocks, so whether a particular single company does well or not is almost a moot point. In my opinion, the companies who do manage to the stock price are the disasters. Because those are the companies that think only short term.
That's not to say that Japanese convention doesn't make it hard to get rid of employees that they don't need, but run for the employees benefit? Come on.
Quote:
Originally Posted by bwik
Sony has been trading on its old brand equity for years. Employees have been paid without delivering value to the customer. Sony could purchase generic electronics (and often does) and simply box them and affix a Sony label. This takes a bare minimum of workers -- maybe 1000 for the company.
That would be even worse than what they do now. What's the point of being in the market if you bring nothing to the table except a logo?
The problem with Sony is simply that they are far too big, far too diverse and have too many distinct P&Ls so that there are few actual synergies between the divisions. Steve Jobs once said that the difference between Apple and Sony is that Apple has just one P&L and Sony has many. The "famous" story is that because Apple had one P&L, Jobs was able to divert marketing money from one product to another (I believe from the Mac to the iPod).
Sony still makes some good products. I have their highest end TV and it really is quite spectacular, but they had lots of manufacturing defects with this model (I happened to get a perfect one). Their NEX camera line is pretty good. They still make good professional products for broadcast, etc. If you have to use a PC, many people like their VAIO laptops.
However, Sony is so big and so diverse, it may be impossible to fix. You basically have to blow it up and start over, which is extraordinarily difficult to do, especially in Japan. When Jobs returned to Apple in July of '97 and streamlined the product line, Apple had about 45 desktops and 8 Power Books. In 1998, they released about 28 machines. Sony probably has about 45,000 products and I'm only counting hardware, not content. It's a completely different world.
The other problem with Sony (although some would see this as a positive) is that once a product line doesn't prove to be ultimately successful, they drop it and stop supporting it. Sony had developed a digital audio system for movie theatres to compete with Dolby and DTS, Sony SDDS. Many theatres and studios bought into it, but when they were still #3, Sony stopped making the equipment and stopped supporting it. Now many theatres have bought Sony's 4K digital movie projector, although it has many critics because it's too difficult to remove the 3D filters when showing 2D movies. But it's hard to say whether Sony will move to the next step which is to use laser light sources to create brighter screen images.
While some SACD audio discs are still made, it's almost impossible to buy them in the U.S.
Sony's co-founder, Akio Morita, was a lot like Steve Jobs. The legend is that the first Walkman got produced because he himself wanted one. No market research, no focus groups, etc. Sony's got to return to that kind of thinking. But with such a big company, it might be way too late.
Comments
You hit the nail on the head. Contemporary management usually looks for the path of least resistance when it comes to "improving" the bottom line and making themselves look better. The easiest way to guarantee an instant improvement in the numbers is to simply fire people. It's not exactly the type of decision that warrants someone being paid millions to make.
This is bad reasoning.
The action described is almost the first thing the new CEO has done. Whether they are a good CEO or a bad CEO remains to be seen but this same decision would be made regardless.
It's the first action of a bad CEO as you imply, but a good CEO would also make the same first move so it proves nothing.
I agree. Corporate structure dictates cost cutting and design-by-consensus. The personal clout of Steve was the only reason Apple was able to build the iPad or iPhone. Both of which were, according to market journalists at the time, stupid products.
Apple won't be producing things so innovative that they appear "stupid" to the marketplace and then suddenly rocket up to 10s of millions of sales.
Reminder, this was in 2010 when the iPad required Steve's personal clout in order to launch. Apple today is just a corporation. Its job will be to maintain what it has against innovative newcomers.
You're making some fairly wide, sweeping assumptions here. How about we wait for Apple to actually start to decline before we describe it as a fait accompli?
No thanks, rim, dell, hp, Sony, Htc, MS, google, Motorola, Nokia, etc. U can keep ur plasticky hardware, running crappy software.
Fire 10,000 people on $30,000 per year = $300m saving ...
assuming that totally arbitrary number you threw out there (i.e., 30K), includes other costs aside from salary.
They are still making a loss in the Playstation sector - last year, they had a loss of $1b in one quarter.
what you are referring to is the Consumer Products & Services division of Sony, not the PlayStation sector.
the Consumer Products & Services division includes television, home video, home audio, digital imaging, PC, gaming (the PlayStation brand), and mobile products, along with networked services. the PlayStation brand is profitatable; what's taking a huge hit is some of the other members of Consumer Products & Services
They could even republish a lot of PS2 titles and make an absolute killing in software sales for next to no effort.
first, Sony has republished several key PS2 franchises and will continue to do so. and, second, it's not a 'no effort' task to port those titles to the Vita or PS3.
I wonder how many billions they can lose before bankruptcy. If they were a bank with private gain and public loss ...
Sony does provide a banking services in the form of http://www.sonyfh.co.jp/web/index_en.html founded in 2004, Sony Financial Holdings Inc owns and oversees the operation of Sony Life Insurance, Sony Assurance, Sony Bank, Sony Bank Securities and Sony Life Insurance (Philippines).
Samsung is taking all its commodity hardware markets away - HDTV's, phones, etc. while Apple is taking its premium hardware markets away, plus the vital services ecosystem for them - iTunes and the rest.
in theory Sony had the same potential for a hardware-based business model that Apple has succeeded with so dramatically. add them all together, plus Sony's media and games, and you certainly have the makings for a real ecosystem.
but it never had its own consumer software. this was the fatal flaw. just a lot of hardware firmware with crude UI's you hated to use. it relied on Windows and now Android for higher level applications and never developed any of its own that are excellent or even noteworthy. mainly Sony just tries to milk - "monetize" - whatever it's got now to generate revenues, but few, except for dedicated gamers, want to pay them for anything.
i see no hope. it's just too late now for Sony to build the in-house software competency it desperately needs and then deploy it. that would take years.
i see the big break-up coming in 2014 after a terrible 2013 financially. the mediaco part will be broken off and sold to one of the other three mediaco giants to generate billions of life-saving cash, and the remaining hardware part will "merge" with one of the other fading Japanese tech giants.
then the Sony brand will live on, in name at least.
— Steve Jobs
Once you get as big as Sony you just start to make crap so people will buy your sh** again. And again.
Same thing will happen to Apple. Just give it time and all them iPhones and mac will b as disposable was those cheap a$$ printers by HP.
Correction: the same thing DID happen to Apple, it nearly went bankrupt. But you can be forgiven for thinking Apple will soon forget the lessons it learned during the second coming of Steve.
"We love Sony."
? Steve Jobs
That's why Sony monitors are in Apple stores selling the Apple TV.
You're making some fairly wide, sweeping assumptions here. How about we wait for Apple to actually start to decline before we describe it as a fait accompli?
You are right to say that. We don't know. But, I do not understand the suggestion that Apple is definitely "innovative" and its track record should be expected to continue steadily. Steve personally commissioned all of Apple's current signature products. It is the tech business. In 5 years, Apple's current products will be irrelevant. ExxonMobil's product line will be very relevant in 2017. Apple now is valued like a sustainable pillar of global business. But sony wasn't sustainable. Obviously it is a cautionary tale for AAPL and calls the conventional wisdom into question. I own some AAPL but sold most already.
One of our family friends was in a secret R&D startup-style division of Sony. They were working on their own operating system for an iPod Touch style device which was in Alpha. According to our friend the device was impressive as they made excellent inroads to creating an integrated Sony ecosystem as well.
Rather than trying to continue innovating Sony canned the entire team. Truly a shame. Sony has gone from the best products in the 1980s to the same "me-too" derivative garbage everyone else is selling. Sony is trying to sell specifications rather than customer service, design and price-for-performance. Sony is a premium brand that lacks brand value or even a better value proposition.
Sony, Panasonic, et al could learn a lesson from Apple: too much choice is just confusing for the customer and must make it difficult to gain economies of scale in the manufacturing process. I've bought a lot of Sony kit over the years and it's always been good quality and very reliable but it's very depressing walking into my local Sony Centre these days. The staff all look bored and there's just too much crap. Compare that to the simplicity of the Apple Stores. If you read one of Sony?s product catalogues it?s just amazing how many products they make.
Samsung also makes a lot of products. But Samsung is just taking market share from Sony.
Good luck to them personally I think they are screwed...
Samsung also makes a lot of products. But Samsung is just taking market share from Sony.
Sad, but true. On a larger scale, Sony represents much of the Japanese industry in general. They're in denial and always pining away at the memories of their old glory days. That's why I smh every time I hear about a Japanese company trying to repeat successes of the past or take a page from Samsung's book, which turns out to be a huge mistake years later. Like Sharp investing billions of dollars in a 10th generation plant in Sakai, only to 3 years later require a de facto bailout from Foxconn to even make that factory even worth using. Or Elpida basically relying on tariffs to block foreign imports of DRAM because they can't sell their own without help. Look at them now--they're bankrupt!
Sony made quite a few mistakes, and others here are right that they always had the potential of creating their own ecosystem. Software expertise is one area they should've explored years ago. They also have a lot of content they could've experimented with integrating into their devices.
All I can say is farewell, Sony. Your Walkman mp3 players were always my favorites with the acclaimed SQ and easy to use UI. Even the bought your A818 years ago, loved it until it got stolen. Used an S639 it until it died, and now am rocking the E354. I'll be sad to see these go if Sony goes down under.
Correction: the same thing DID happen to Apple, it nearly went bankrupt. But you can be forgiven for thinking Apple will soon forget the lessons it learned during the second coming of Steve.
Yes, because Apple is infallible and eternal.
On both the Sony laptops I've known the letters on some of the keys have rubbed off with wear, so one needs touch-typing skills to use them.
I think a manufacturer of laptops who can't even design a keyboard that's fit for purpose should seriously consider another line of business.
what you are referring to is the Consumer Products & Services division of Sony, not the PlayStation sector.
the PlayStation brand is profitatable; what's taking a huge hit is some of the other members of Consumer Products & Services.
It is lumped in with other things so hard to say which parts are profitable. The networked services division had a $1b loss in 2010:
http://www.industrygamers.com/news/p...cal-year-2010/
Then $429m profit 2011 but now they say the Vita has contributed to major losses:
http://www.gameranx.com/updates/id/5...r-2-9b-losses/
"The division is under heavy pressure to deliver better numbers with the release of the PlayStation Vita, which has not only failed to meet sales expectations in Japan, but contributed to major losses for the company."
1.5m units per quarter is dire. Even assuming growth internationally, it means there will only be a user-base of 10m tops by the end of the year. Apple sold 37 million iPhones last quarter.
No PS4 for another 3 years either:
http://www.inquisitr.com/179802/play...espite-rumors/
I personally think Sony makes better hardware than Nintendo and Microsoft but a Playstation just sits in the corner and it really doesn't offer a better gaming experience than a 360, especially with XBox Live.
I think the Vita is a great piece of hardware but it needs great games and lots of them to justify investing in the product. Apple's App Store is great for this because if you buy a new phone, you still get all the software and you can start right where you left off and publishers immediately get a huge user-base to work with.
I don't think they should scrap the Playstation, just the portable hardware division and go software-only for phones. Apple is suffering here too. Their iPod Touches sell 7 million per quarter vs 37 million iPhones. The writing is on the wall, people don't want limited-function mobile devices any more. Nobody is making more pockets.
iPhone = GPS + internet + games + camera + apps + phone
The danger with companies is they get run for the employee's benefit not the shareholders (who are widows and orphans trying to pay for their mortgage too, in many cases).
That may be the most absurd statement I've ever seen posted on this site. No corporation that I think of was ever run for the employees' benefit. I can think of a few that were run for the senior executives' benefit (Enron, etc.), but never for the employees. And "widows and orphans" tend to have their pensions and other investments in mutual funds, not in single stocks, so whether a particular single company does well or not is almost a moot point. In my opinion, the companies who do manage to the stock price are the disasters. Because those are the companies that think only short term.
That's not to say that Japanese convention doesn't make it hard to get rid of employees that they don't need, but run for the employees benefit? Come on.
Sony has been trading on its old brand equity for years. Employees have been paid without delivering value to the customer. Sony could purchase generic electronics (and often does) and simply box them and affix a Sony label. This takes a bare minimum of workers -- maybe 1000 for the company.
That would be even worse than what they do now. What's the point of being in the market if you bring nothing to the table except a logo?
The problem with Sony is simply that they are far too big, far too diverse and have too many distinct P&Ls so that there are few actual synergies between the divisions. Steve Jobs once said that the difference between Apple and Sony is that Apple has just one P&L and Sony has many. The "famous" story is that because Apple had one P&L, Jobs was able to divert marketing money from one product to another (I believe from the Mac to the iPod).
Sony still makes some good products. I have their highest end TV and it really is quite spectacular, but they had lots of manufacturing defects with this model (I happened to get a perfect one). Their NEX camera line is pretty good. They still make good professional products for broadcast, etc. If you have to use a PC, many people like their VAIO laptops.
However, Sony is so big and so diverse, it may be impossible to fix. You basically have to blow it up and start over, which is extraordinarily difficult to do, especially in Japan. When Jobs returned to Apple in July of '97 and streamlined the product line, Apple had about 45 desktops and 8 Power Books. In 1998, they released about 28 machines. Sony probably has about 45,000 products and I'm only counting hardware, not content. It's a completely different world.
The other problem with Sony (although some would see this as a positive) is that once a product line doesn't prove to be ultimately successful, they drop it and stop supporting it. Sony had developed a digital audio system for movie theatres to compete with Dolby and DTS, Sony SDDS. Many theatres and studios bought into it, but when they were still #3, Sony stopped making the equipment and stopped supporting it. Now many theatres have bought Sony's 4K digital movie projector, although it has many critics because it's too difficult to remove the 3D filters when showing 2D movies. But it's hard to say whether Sony will move to the next step which is to use laser light sources to create brighter screen images.
While some SACD audio discs are still made, it's almost impossible to buy them in the U.S.
Sony's co-founder, Akio Morita, was a lot like Steve Jobs. The legend is that the first Walkman got produced because he himself wanted one. No market research, no focus groups, etc. Sony's got to return to that kind of thinking. But with such a big company, it might be way too late.