This Was Sony

The company that has become largely irrelevant is in the news again today, with a piece alternately touting its possible revival or its imminent death by financial vultures.

Special Report: The Sony Schism

Through the magic of Google Books, let’s take a brief look at Sony in history.

All of the following images can be clicked to be very large. I’m using up space for the new iPad’s Retina Display to make a point I’ll reveal at the end.

This is an ad that appeared in the December 1961 issue of Ebony magazine:

Notice what I highlighted in red. Could Sony say that today? I don’t think so.

This ad is from the April 19, 1968 issue of Life magazine:

Sony, advertising something costs less? Could that happen today? Stringer always wanted to sell the most expensive stuff!

This ad was the inside front cover (a premium position) in the May 15, 1970 issue of Life magazine:

And that ad was the truth! Look at what Sony did:

How Steve Jobs ‘out-Japanned’ Japan

By way of example, Deutschman tells the story of how Sony entered the color TV marketplace, noting that in the Sixties, when color TV was going from 3% to 25% of the market, Sony was one of the few electronics companies that didn’t sell a color model. “People were telling Ibuka, ‘You have to come in to this market, everyone will take your market share,’” says Deutschman. “And Ibuka refused, saying, ‘No, we will only do great products. We will only do high quality goods. We will only do breakthrough technology.’”

As a result, the company found itself in a precarious financial situation, losing out to its primary rivals — until it came upon the aperture-grille technology that Sony unveiled in 1966 as the core of the Trinitron TV. A full 25% brighter than its rivals, Trinitron became the best-selling color TV for the next quarter century.

“At the time, Sony was committed to not releasing a crappy product just because the market was there; they waited until they had a truly revolutionary innovation, combined it with great design and then profited from it for long, long time,” says Deutschman. “For decades, Sony was a perfect place for engineers to fully use their creativity, because it was focused on bringing real meaning and benefit to society by making great products. Sadly, in the last couple of decades, Sony has lost its way.”

Boldfaced emphasis added by me.

This ad was in the April 15, 1974 issue of New York magazine:

This ad was in the September 11, 1975 issue of New York magazine:

We’ve had three full-page ads by Sony touting its superior display technology. Yet what was the stance of the person who once led Sony? According to the Reuters report published today, this:

“When I was in charge of Sony, I was criticized for saying we shouldn’t make panels. But when Toyota builds cars it buys the steel from Nippon Steel. The value is in the car, not the steel,” says Idei, 74.

Boldfaced emphasis added by me.

Display panel technology — a commodity like steel? Steel is a mature industry, over one hundred years old. It’s not like we’re going to suddenly get Rearden Steel out of nowhere.

On the other hand, display technology is still in its infancy. And what names come up when discussing displays these days? eInk, Pixel Qi, Liquavista, Mirasol — and Samsung. Sharp gets an honorable mention only because they failed to provide a new low-power Retina Display for the latest iPad (who would even think of them in terms of display otherwise?). Notice that Sony is not even in that list.

And yet Sony was once all about the display.

Today, Sony is all about the fear:

An option being mulled, another executive told Reuters, is to divorce TV from the rest of Sony and try and merge it with the battered TV businesses of Japan’s other struggling set makers. Both Panasonic and Sharp are in trouble. It would be a marriage of convenience that a Japanese government anxious to safeguard jobs and spawn national champions could help forge, the executive added.

A framework for such a grand compact exists already. Last year, Sony agreed to bundle its small operations for making liquid-crystal display screens with those of Toshiba Corp and Hitachi Ltd. The merged company, Japan Display, is two-thirds owned by the taxpayer-funded Innovation Network Corp of Japan.

Boldfaced emphasis added by me.

So even in Japan, taxpayers get left holding the bag, subsidizing the losses of gargantuan companies.

Here’s fear too:

It contributed to Sony losing its lead in music players, insists Jay Vandenbree, a former president of consumer sales at Sony Electronics in the United States. Executives from the music business, he said, raised a flag over content protection, delaying a shift to hard disc drive players, just as Apple with its iPod was positioning itself to steal the market Sony pioneered.

“I see a lot of things written saying that Sony missed the portable music trend, the hard disc player, but it’s not true – they made a conscious decision not to build it,” adds Vandenbree, who left Sony in 2009 for LG.

Boldfaced emphasis added by me.

Did Akio Morita worry about “content protection” when Sony introduced the Compact Cassette recorder? The home VCR? The Walkman?

No, don’t tell me it’s a different story now that Sony owns “content producers.” Because it’s not Sony owning them — it’s them owning Sony.

Their dinosaur fear, bred in the bone of people who know they can’t understand the Internet and technology, drives Sony now. Not Sony’s innovation, not Sony’s past fearlessness and confidence. It’s now as if Sony lost the Copyright battle for home recording after it introduced the Betamax VCR!

Here’s another indication of what Sony once was. This ad appeared in the February 27, 1967 issue of New York magazine:

Wow, why does that still look so familiar, even though it’s from 1967 and this is now 2012?

Because Apple did the update to it:

I can visualize Morita looking at that Apple Remote and smiling in approval. Does anyone at Sony today even realize they pioneered it?

You know that poor relative who once had some minor glory and at family reunions keeps repeating the story, as if it still means something?

That’s what Sony has become. It keeps citing its past glory — Morita’s Walkman — whenever it can.

Oh, Sony. Finally, just shut up about the Walkman. All it does is remind people of how far you’ve fallen. You’ve become that annoying relative that people outwardly pity but inwardly despise.

And finally, this ad appeared in the November 22, 1976 issue of New York magazine:

When was the last time Sony could say it had “the next thing”? Bueller? Bueller?

Even when Sony tries to do something right, it messes up. It switched its Sony Reader from Linux to Android. Did that make it competitive against the Android-based Nook Touch? No. The rooting community still concentrates on the Nook Touch.

Why? Just go see a new Sony Reader in person. It has fugly shiny plastic that feels cheap. And Android hackers have discovered that Sony even screwed-up with its edition of Android. Some programs that will run on a Nook Touch won’t run on a Sony Reader.

It’s obvious that Sony saw what was happening with the original Nook and hacking and gambled they could win by going down that road too. But they failed. Had they any true vision, they would have made the entire Reader an eInk Android tablet, with the Reader software being just one app on it. It really wouldn’t have made any difference to readers. The app could have still presented the same UI that currently takes over the entire Reader. But even that might not have helped because of just how shiny and ugly and cheap-feeling the hardware is. And I don’t think anyone at the top of Sony is going to approve a total re-engineering of the Reader to make it a tablet and un-fugly and un-cheap.

And what’s the real bottom line of that Sony Reader debacle? Sony got beaten by Barnes & Noble — a bookstore! A bookstore!

So where does that leave Sony today? The vultures are circling:

Sony is not the only Japanese tech company stuck with a low stock price. It is, however, an easier target for acquisition than its Japanese peers. With weaker ties to its main bank than rivals such as Panasonic and Sharp, it counts fewer big lenders among its top shareholders and is more than 40 percent owned by foreigners.

Analysts’ estimates value a broken-up Sony at as much as $25 billion, representing a return of around 20 percent for any buyer with the moxie to grab one of Japan’s best known firms currently worth around $21 billion. That break-up valuation is based on multiples of earnings of its movie and music businesses, the consumer electronics unit, games division and insurance business.

Yesterday I came across a Peter Drucker quote that fits the above scenario perfectly:

No financial man will ever understand business because financial people think a company makes money. A company makes shoes, and no financial man understands that. They think money is real. Shoes are real. Money is an end result.

Emphasis in the original.

If Sony wants to trade on past glories, it needs to let loose its engineers to create some breakthrough display tech that will rule the world. Where is the flat-panel equivalent of the Trinitron? That is what would matter.

And why did I include ginormous images in this post to accommodate the new iPad’s Retina Display? To rub salt in your wounds, Sony! Everyone knows it’s Samsung — and not you — providing that screen.

Sony has become irrelevant.

Don’t invite it to your family reunion.

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3 Comments

Filed under Other Hardware, Sony Reader

3 responses to “This Was Sony

  1. James

    Awesome research and commentary. Thanks.

  2. Mike, thanks for another great read. Your research is unreal. You actually should write for a living. As the carpenters say, you hit the nail on the head. In years past I only bought Sony as it was quality. Back in the sixties, seventies and early eighties I had Betamax, Trinitron, Walkman, and the Sony shortwave radio as my gadget stash. Today I have only a 25 year old walkman that I use infrequently on walks. Was very surprised to read that the taxpayers are supporting corps over there. Sony’s last two ceo’s have been pathetic and they just about dropped off the face of the earth to me, at least. To be honest about the only time I hear of Sony is when I read your reports on the readers. That is a shame, but looking back in this country a lot of big name corps have biten the dust. Oh, thanks for the trip down memory lane with the photos.

  3. Geoff-UK

    Nice piece–understand your focus was on monitors so you could hit them with the Samsung line at the end–but I also think a key item that led to Sony’s downfall is their demand that customers enter the walled garden of Betamax (didn’t work for Apple and their AAC format, and I think eventually Amazon will *eventually* lose their attempt to capture people in Kindle’s prop format).

    Also Sony screwed themselves with putting that bullshit rootkit on a freaking music CD if you tried to rip it to an MP3: here you’ve bought a legitimate copy of Sony’s music, and want to use it on your computer. And they put a freaking rootkit inside to live on your computer indefinitely. And they refused to admit culpability when consumer advocates discovered it. Eff you Sony. Eff you in the F-hole.

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