Ronnie05's Blog

Sony: Of lost opportunities and bygone glories

Posted in Industry updates by Manas Ganguly on April 13, 2012

In an event on April 12th, Kazuo Hirai, Sony’s executive officer heralded change in Sony saying that “The time for Sony to change is now.I believe Sony can change.” In-spite of Sony’s impressive tech credentials – not many outside and inside of Sony believe that “Change” could happen. Sony which once defined itself as vanguard of technological prowess is suddenly faced with a deficit of strong ideas to keep it relevant. Coupled with the rising Asian rivals and a strong Yen, Sony suddenly has seen a huge dip in competitiveness. Sony has not turned profit since 2008, is expected to return a loss of $6.4 billion this year and hasn’t delivered a hit product in years.

Sony’s stock value has been on the dip for most of the last decade and is 89% off its historic highs. It is trading at a quarter of the price of last decade. Sony’s m-cap is 1/9th of Samsung’s and 1/13th of Apple’s.

What went wrong is a tale of lost opportunities and disastrous infighting. It is also the story of a proud company that was unwilling or unable to adapt to realities of the global marketplace. Sony’s gravest mistake was that it failed to ride some of the biggest waves of technological innovation in recent decades: digitalization, a shift toward software and the importance of the Internet. One by one, every sphere where the company competed — from hardware to software to communications to content — was turned topsy-turvy by disruptive new technology and unforeseen rivals. And these changes only highlighted the conflicts and divisions within Sony.

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