Too little, too late? Sony getting killed by Apple in digital audio

“Months before Sony was ready to unveil its new portable music player, it had to settle a fierce internal debate,” Kenji Hall reports for BusinessWeek. “Though the Japanese electronics and entertainment giant had invented the idea of portable music in 1979 with its Walkman cassette-tape players, Sony’s digital-era gadgets were getting creamed by Apple’s iPod. Sony execs couldn’t help but wonder: Was it time to retire the Walkman brand for something fresher?”

Hall reports, “‘The Walkman’s image was from decades ago, when it played tapes,’ says Koichiro Tsujino, co-president of Connect, Sony’s digital audio business. ‘Inside the company, some felt we should change the name.’ But Tsujino was against walking away from a brand that had helped Sony sell an estimated 350 million gizmos worldwide. In the end, his view prevailed. On Sept. 8, Sony took the wraps off a new lineup of Walkman digital-music players. The sleek, oval-shaped device with a built-in hard drive and storage space for up to 13,000 songs represents the company’s latest foray into the iPod-dominated market.”

Hall reports, “Now with newly appointed Chief Executive Howard Stringer preparing to announce a turnaround plan later this month, Sony is focusing on key products to boost profits in its core consumer-electronics and music divisions, while restoring luster to its brand.”

Hall reports explains that “in 2004, Sony shipped about 850,000 Walkmans to retailers worldwide, according to Deutsche Securities in Japan.” And Sony is targeting global sales of around 4.5 million Walkmans this year. Ouch. Even if they hit their 4.5 million target for the year, Apple sold more than 4.5 million iPods in the last 60 days.

Full article here.

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Here’s what Sony needs to do:
• Stop lying about storage capacity. Sony’s ridiculous song capacity claims are based on: Estimated at 4 minutes per song compressing in ATRAC3plus at 48-Kbps. Source: Sony. That’s great, if you like AM radio sound quality. Apple’s realistic song capacity is based on 4 minutes per song and 128-Kbps AAC encoding.
• Even if Sony stops lying, Stringer still needs to pull the plug. Sony needs to stop distracting themselves with the portable music player + online music businesses: it’s too little, too late. Sony has lost this market. Everybody knows it. Sony needs to admit it and get on with other things.
• Stop pushing iPod-incompatible DRM-laden pseduo-CDs on consumers in a weak attempt to force Apple to license FairPlay and/or add WMA support to the iPod. It isn’t going to work and makes Sony look like sore losers.
• Focus on making better TV’s and displays. Sony has slipped in recent years.
• Figure out better and more ways to work closely with Apple, instead of petulantly withholding your signatures on the iTunes Music Store Japan and Australia.

Related articles:
Sony’s new Windows-only ‘Connect Player’ bears eerie resemblance to Apple iTunes – September 09, 2005
Also-ran MP3 player makers miffed by Apple’s impossibly low price for iPod nano – September 09, 2005
Sony and Warner holding out on Apple iTunes Music Store Australia – September 08, 2005
Sony Connect President in wake of iPod nano: ‘we will accelerate our challenge’ to Apple iPod – September 08, 2005
Apple close to deal with Sony for ‘online music download service for Japanese iPod users’ – September 05, 2005
Bad news for Sony: millions worldwide choosing Apple iPods – August 22, 2005
Sony to combat music market ‘maestro’ Apple Computer with ‘Walkman Beans’ – August 18, 2005
Musicians stage mutiny against Sony, defiantly offer music via Apple’s iTunes Music Store – August 10, 2005
Apple’s Japan iTunes Music Store debut more bad news for Sony – August 04, 2005
Sony BMG and EMI try to force Apple to ‘open’ iPod with iPod-incompatible CDs – June 20, 2005

24 Comments

  1. I sent Sony’s music store (BMGMusic.com) an e-mail urging them to play nicely with Apple. I told them they could co-exist peacefully and profitably. Implied threat: I’ll cancel my BMGMusic.com subscription and any other future purchase I may have intended to make.

  2. SONY is just too big for it’s own good, the conflicts with owning so many avenues keeps it stagnated.

    This iTMS conflict will spill over into other areas where Apple and SONY have to have collaborate on.

    Ultimatly the consumer decides, we decided to use iTunes and iPods, forcing some lame crap on us isn’t going to wash.

    Some internal politics at SONY need to get straightened out.

    Hopefully this iPod Nano will help force SONY’s hand and also bury Creative alongside Rio.

    THERE CAN ONLY BE ONE!

    muhahahahallalla!!!

    MDW “approach”

  3. the last MacDailyNews Take comment regarding sony working more closely with apple seems like the best move for them.

    apple have already employed sony techs. apple acknowledge they have a historical creative debt to pay to the likes of sony – who are still leaders.

    but where sony fall short is ‘pushing things forward’ they just arent compelling and havent been for a long time.

    work with apple – bring to market joint technologies – sony make GREAT cameras – they already have a fantastic joint venture with Erriccson in building brilliant mobile phones – bring Apple into the fold and the future looks great…

    sony is bloated – they need to streamline – apple went through the same sort of bloatedness in the mid 90’s before steve jobs returned and cut the fat.

    right now you have different arms of sony who are actually competing with each other.

    they need to reign in their product lines and divisions, re-focus, co-oporate more with other market leaders (but NOT microsoft! – the road to sure death) and innovators…

  4. Sony is going to get Pimp-Slapped by Apple on digital music. Each passing day sees iTunes and the iPod become more and more entrenched as the predominant hardware/software combination. The same day sees Sony and the others fall farther and farther behind. If Sony didn’t have a significant stake in a music company they would already be out of the equation.

  5. Sony has lots of problem, the main one being that every division if fighting against other Sony divisions for power and prestige. Stringer need to fire a lot of management real soon and put a stop to this crap.

    As far as digital music goes, they havebacked themselves into a corner strategically. They thought that there was “synergy” in having both hardware and content, and that they could leverage them by using proprietary standards like ATRAC. However, that doesnt work for two reasons. One, consumers will undoubtedly like to play music published by various labels, not just Sony. So being locked into Sony’s DRM is stupid. Two, as Sony is a competitor, why would other record labels offer their content on Sony’s service using Sony’s DRM?

    Although record labels aren’t happy about Apple’s power in the industry right now, they are really nothing more than a big distibutor, like Wal Mart, and they NEED to deal with Apple at this point, even if they bitch about it.

    There is no way Sony can catch up while they try to keep Connect and ATRAC alive. They either need to kill it or spin the content division off into an independent company

  6. SONY simply lost focus when they allowed the content business to mix with the electronic box business. It isn’t easy to derive synergy from content, audio AND computer [including software] businesses. I imagine that content and audio led development, while the third arm, shackled as it is to the Windoze OS, could contribute little. Such a paradigm was destined to underachieve against Apple’s software-based paradigm.

    The coolest device won’t do it. A lockdown on content won’t do it. Solution: Change the paradigm.

    Unfortunately, it’s probably too late already. Unless … they team up with Apple on a plan to share the market. While possible, it means paying out a chunk of player revenue, investing in Apple or iTMS, and playing by Apple’s rules. If SONY thinks of it not as a surrender but an alliance with a stronger partner, both could win (at the expense of M$’s .wma).

    I’m not holding my breath.

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