I hope the PS3 turns out ok. I want quality RPGs to play on consoles.
You guys are giving Sony way too much credit based on the past. Things change. Sony used to dominate walkman and portable players...who dominates that area now? Sony Pictures is crap. Sony owns a whole shitload of oddball companies currently. They're losing focus.
Cutting Sony, a Corporate Octopus, Back to a Rational Size
New York Times
WAKO, Japan When Kumiko Ishioka bought car insurance last year, she chose the company that offered the cheapest rate. It also helped that the company bore the same brand name as that on her life insurance policy, her favorite skin lotion and her television set Sony.
"Sony is definitely a name you can trust," Ms. Ishioka, 38, the owner of a clothing boutique in this Tokyo suburb, said. "But it's not really an electronics company anymore.
In the United States, Sony is known as an aggressive electronics giant that expanded into music and Hollywood films, with mixed results. But at home in Japan, Sony is large and diffuse, a sprawling conglomerate that sells products as diverse as flashlight batteries, online banking services even foie gras.
This presents a problem. Sony has expanded into so many business areas in Japan and abroad that it has blurred its original identity as an engineering innovator. Analysts say this murkier image threatens one of the company's most profitable assets: the so-called Sony premium, the higher prices long commanded by its electronics products, which still account for 64 percent of revenue, excluding sales between Sony divisions.
Restoring this premium, they say, is one of the most pressing challenges facing Sony's chief executive, Sir Howard Stringer, who took over nearly a year ago, as he tries to reinvigorate the company after years of lackluster products and disappointing profits. While earnings have begun recovering, analysts say, the premium is still shrinking.
Sony remains one of the world's best-known brands. But even in the United States, analysts say, it is as likely to be associated with the movie "The Da Vinci Code" as with portable music devices, a product category Sony invented in 1979 with the Walkman cassette player but which the Apple iPod now dominates.
"What is Sony?" asked Hitoshi Kuriyama, an analyst with Merrill Lynch. "We don't even know anymore. Consumers used to pay more because the brand meant something special."
While Sony has lost the most ground in Japan, analysts say the Sony premium has also shrunk in the United States, where the company has had to price newer products like high-definition television sets close to the level of rivals like Sharp, Panasonic and Samsung.
"Sony has to trim its premium," said Paul O'Donovan of the market research company Gartner. "The brand equity, although still high, is clearly on the decline in consumers' minds."
Sir Howard calls restoring Sony's image a priority, to prevent the problems in Japan from spreading overseas.
He has pledged to refocus the company on electronics, and on creating the sort of "champion products" that made Sony famous in the first place. In February, he announced plans to sell several noncore businesses based in Japan, including a cosmetics maker, a mail-order shopping company called the Sony Family Club and a chain of Parisian restaurants.
While Sir Howard has made progress, as was demonstrated in a recent upturn in earnings, analysts say he has a long way to go.
"We need to rebuild the brand seriously," he said in an interview, "in terms of energy and perception around the world."
Globally, the company has about 1,000 subsidiaries and affiliates, of which about a third are unrelated to its core electronics business. While many are in Japan, they include the likes of the Sony Metreon shopping mall in San Francisco.
In fact, the Sony group's most profitable line of business last year was not electronics or entertainment, but finance. The company has three financial units in Japan, whose low fees have made them popular: Sony Life Insurance; Sony Assurance, a nonlife insurer whose coverage includes auto policies; and Sony Bank, an online lender. These subsidiaries earned $1.7 billion in the fiscal year ended in March, though losses in electronics dragged Sony's overall profit down to $1.1 billion.
Sony's success as a cut-rate financial company seems to run counter to its desire to remain a top-end brand in electronics, analysts say. And nowhere is the loss of the Sony premium more apparent than in Japan, where it took in 20 percent of its electronics-related revenue last year.
Visit electronics stores in Tokyo, and Sony's new Bravia line of liquid-crystal-display television sits prominently in front, next to the rival Sharp and Panasonic. This is the work of the new chief executive of Sony's electronics division, Ryoji Chubachi, who regularly visits large retailers to offer incentives for making Sony products more visible something his predecessors never deigned to do.
More important, Bravia TV's now cost about the same as rival sets, the result of price-cutting last fall as Sony tried to regain its position as the world's top-selling TV maker. It succeeded, replacing Sharp last quarter, according to an American market data company, Display Research. But this success came at the cost of Sony's ability to charge more than its competitors.
"The Sony premium keeps getting smaller," said Hiroshi Takada, an analyst in the Tokyo office of J. P. Morgan. "The top end of the TV market is much more crowded now."
Sony's slipping status is not lost on consumers here. "Buying a Sony TV used to be like buying a Mercedes-Benz," said Yoshihiro Ueda, 42, a bank employee shopping for liquid-crystal-display television sets at a discount retailer in central Tokyo. "It's still a good name, but Sony doesn't stand out anymore." Mr. Ueda said he was buying a Sharp TV instead.
This hazier image is also showing up in recent consumer surveys. Last month, BP Nikkei Consulting in Tokyo released a survey showing that Sony dropped to Japan's eighth-most admired brand, from the top position last year. The number of consumers saying that Sony showed "conspicuous individuality" dropped to about 25 percent, from about 40 percent the year before, BP Nikkei said.
For a generation of consumers in Japan and the United States, Sony was the company that transformed personal entertainment with its Trinitron color television sets, Walkman portable music players and compact disc players.
But Sony also showed early ambitions to reach beyond electronics and become a global conglomerate, as many companies aspired to do in the decades after World War II. Akio Morita, the company's co-founder, envisioned offering consumers not just television sets and stereos, but movies and songs to play on them and also the bank credit with which to buy them.
Sony made its first foray into finance, establishing a life insurance unit in 1979. The casualty insurer and bank were established in 1999 and 2001 respectively under Nobuyuki Idei, then chief executive, who shared Mr. Morita's penchant for empire-building.
It was also under Mr. Morita that Sony started a French restaurant chain in 1966, licensing the Maxim's de Paris name. He later led Sony into entertainment, acquiring record labels and then Columbia Pictures in 1989. Seen at the time as a symbol of Japan's rising economic might, the Columbia takeover ended up costing Sony billions as the Japanese struggled to understand Hollywood's culture.
Since he took Sony's helm last June, Sir Howard has promised to increase cooperation between the electronics and entertainment arms. He has also tried to prune the sprawling electronics business by shedding 600 of Sony's 3,000 product models, including the Qualia line of luxury electronics and Aibo the robot dog.
"Sony was just too diversified," said Iwao Nakatani, dean of Tama University in Tokyo, who was a member of Sony's board until last year. "Howard Stringer is doing what his predecessors were unable to do."
So far, Sir Howard has defied expectations that he would sell larger noncore businesses, particularly the three big finance units. Sony has flirted with selling parts of its financial units before, including talks with several American and European financial companies four years ago about selling a stake in Sony Life, the company said.
Many analysts and even Sony employees say Sir Howard could spin the finance units off as early as next year. One possibility, according to analysts, is to take them public while holding on to a controlling stake, a sale that could earn Sony billions of dollars.
But many Japanese are sad to see some Sony products go. Entire Web sites have sprung up on which owners of Aibo robot dogs fume about the product's demise.
Ms. Ishioka, the boutique owner, said she hoped nothing happened to the line of skin lotions and treatments bearing the Sony name and sold by Sony's cosmetics maker, B& C Laboratories. She said she first started using the products after hearing that Crown Princess Masako used Sony skin care products before her wedding in 1993. Ms. Ishioka said she also visited Sony's cosmetic outlets for beauty massages, a service popularly known here as the Sony Esthe.
"I want my Sony Esthe as much as my Sony TV," she said
