The recent, near constant stream of bad news flowing from Sony reached new levels earlier this week when the company announced that it would log a record $6.4 billion annual net loss. Accompanying that news was an unconfirmed report from Nikkei that Sony would also cut 10,000 jobs. Just hours ago, newly appointed CEO, Kazuo Hirai, held a press briefing in Tokyo to confirm the elimination of 10,000 workers and clarify the seemingly rocky future of the company.
Re-emphasizing the company's new "One Sony" slogan introduced last month, Hirai addressed the media and struck an aggressive posture by saying, "I will definitely change Sony and revive it. There is no time but now to change." If Hirai's wording sounds a bit urgent, that's probably because the company's stock has been on a virtual rollercoaster ride in recent years as Sony has gamely attempted to mount viable responses to the market success of rivals like Apple and Samsung.
When Apple's original iPod began to erode Sony's portable music player market well over a decade ago, the Japanese company was slow to respond, resting largely on the conceit that its long history of market dominance would eventually squash the upstart device. Then, when the iPhone arrived in 2007, a similar attitude seemed to take hold as Japan Inc underestimated the Asia market's willingness to switch to touch-screen smartphones over the then wildly popular and feature-rich flip phones of the day. Since then, companies like Korea's Samsung and Taiwan's HTC have rapidly responded to Apple's iPhone and iPad challenge with well-designed devices of their own, fueled by a desire to directly compete with Western brands on an equal footing.
But the slow moving corporate behemoth that is Sony has, at least by all appearances, nearly always been a step behind its Asia-based neighbors in effectively responding to the new landscape of consumer electronics. Whether the problem was a failure to believe that Sony could ever be toppled from its perch, or maintaining a product strategy built around nondescript model numbers rather than category defining devices with compelling names, or a simple lack of vision due to Japan's renowned "Galapagos syndrome" isolation, the end result has been a Sony that now struggles to retain the cool cachet its name once evoked in consumers.
And now, as if South Korean and Taiwanese electronics firms weren't enough of a challenge, even China appears poised to move beyond the limited role of cheap supplier into a more brand-centric approach. In short, Asia is in the midst of an incredible new tech boom, and Japan's leading icon of electronics excellence, Sony, is getting left behind.
This latest press briefing from Sony was designed to finally acknowledge the problems plaguing Sony as well as offer a solid plan to address the various issues hindering the company's ability to compete. The new plan will focus on a sales target of 6 trillion yen ($74 billion) and an operating profit margin of 5 percent in its electronics business, and sales of 8.5 trillion yen ($105 billion) for the entire Sony group by 2015. Sony's plan for hitting this goal involves turning around its ailing television business, exploring opportunities in medical and 4K-related technologies, and strengthening its core businesses of mobile, digital imaging and gaming.
The interesting thing about Sony is that, despite occasional product mishaps and security breaches, the company maintains a surprisingly resilient positive brand image in the U.S. marketplace, earned through decades of excellence and innovation. But tech consumers move fast, and that good will won't last forever.
