Sony’s stature in the consumer electronics market has waned since its glory days of the 1980s and 1990s, and the recent announcement of 10,000 layoffs is a clear indication of the scale of the issues facing the company. New CEO Kazuo Hirai has moved to address the lack of unity within the company through restructuring.
With the buyout of Sony Ericsson and the introduction of the Sony Entertainment Network, the company is at last moving in the right direction. Ovum’s latest report – Sony (Smart Device Vendor Profile) – reviews Sony’s smart devices strategy and assesses the company’s best options for re-establishing itself in the consumer electronics market.
Sony’s best opportunity to regain relevance is to focus on becoming the premier multi-screen vendor. Multi-screen integration is becoming a key component of connected digital consumer services and Sony is now one of the select set of companies that has the assets required to compete at this level. However, integration has never been a strength for Sony, so building a successful and compelling multi-screen experience is going to be a challenge for the company, especially as its competition lines up to do the same.
Sony’s assets are not as valuable as they seem
On paper, Sony is in an enviable position; it has arguably the widest range of connected consumer electronics devices, an established global brand, and an extensive range of content services. However, the reality of the situation is somewhat different. Both Sony and Sony Mobile are struggling and losing money. While part of this is down to internal organizational and operational issues, a large part of this is down to outward-facing products and brand perception.
While Sony has a heritage as a consumer electronics powerhouse, its heyday is in the past and Sony is no longer the brand it used to be in the minds of consumers. At the same time, Sony Ericsson has struggled to establish itself in the smartphone market by not effectively differentiating itself and giving users a reason to purchase its devices over its competitors. It currently sits as a tier-two Android manufacturer behind the likes of Samsung and HTC.
Even its content services are not as strong an asset as they might appear. While Sony does own its own media content, it will be hard for the company to use this to add a competitive advantage to its devices beyond reducing its own costs.