Sony’s decline: Have they eaten the poison Apple?

by Kelli Richards   |   February 10th, 2013

Sony-and-Apple“Those who cannot remember the past are condemned to repeat it.” – George Santayana, 1905

For today’s history lesson, we’re going to look at two of the biggest names in the tech industry that have risen and fallen in complimentary distribution with one another since the 1980’s. As one company climbed to the top, the other plummeted but now the tides have changed.

I’m talking of course about Sony and Apple, two companies with storied histories that bear some key similarities to each other. In the successes and failures of each company, the brilliance and blunders seem to be passed back and forth. In order to move forward towards the future, we must look back at the past; so let’s take it from the top.

The 1980’s were a strange time in America; MTV, big hair, and the Brat Pack are some of the first things that come to mind when I think of that decade. Of course, the 1980’s also ushered in a new era of technology, and Apple and Sony were at the forefront. In the beginning of the 1980’s, Apple came out strong with a record breaking IPO and the Macintosh computer. Things quickly went south for the computer giant, as infighting and a decline in sales ultimately saw Steve Jobs leave the company in 1985; beginning what many would refer to as “the dark years” at Apple. During that same time, Sony had started the 1980’s with dismal profits during a global recession that saw a drop in electronics sales.

One of the things that saved Sony was its creativity and drive to pioneer new technologies. While it lost the “format wars” between VHS and Betamax, it was able to move past and eventually develop technologies such as the Compact Disc and Walkman. Similarly, it branched out beyond consumer electronics and got into the music and movie publishing industries; creating a revenue stream that would allow it to profit several times over from single products. Its latest demise, however, came from the company aggressively expanding into new businesses and technologies with little communication or collaboration between the departments. The question now is “Will they bounce back?”

Apple was able to bounce back from those “dark years” when Steve Jobs came back. Under his leadership, the company was able to re-focus and re-establish its brand. They were able to focus on creating great products from top to bottom, coupled with a user experience that was second to none. If Sony wishes to recover in the same way Apple did, then perhaps they’ll do the same. Sony’s reach is a bit broader than Apple’s so in order to do that, they’ll need to increase the communication and support between departments. They have all the parts they need to return to the top, they just have to deliver what the customers want. Apple delivered things that consumers wanted before they even knew that they wanted them. Sony’s approach as of late has been more stagnant, where they wait for something to come out and find a way to replicate it.

The sting of a few hard blows to a company can send it reeling and certainly bruise some egos. Sony needs to take a whiff of the smelling salts and come out of the corner swinging. Once they return to their roots of innovation, creativity, and quality they’ll be sure to see success once again.

 

Kelli Richards

Kelli Richards is a recognized thought-leader in digital music and entertainment with deep expertise in digital distribution and branded content, as well as working with a plethora of luminaries and innovators. She drove music and entertainment initiatives at Apple for 10 years, and helped to birth a whole new consumer movement around disruptive technologies & emerging business models. As President of The All Access Group, she has worked closely with a wide range of start-ups, Fortune 100 companies, and established artists and industry leaders alike as a sought-after strategic consultant for the past 15 years. www.allaccessgroup.com.
  • Rich

    “Once they return to their roots of innovation, creativity, and quality they’ll be sure to see success once again.”

    But will they do that?

  • Defendor

    Here is my prediction. Sony won’t bounce back.

    The fundamental flaw in Sony corporate structure is that they are now also a Media company. Media companies tend to be anti-innovation and even anti-consumer, and they are often actively opposing the consumer electronics industry.

    Media companies fought tooth and nail against VCRs, which succeeded despite them. They fought against DAT (Digital Audio Tape) which they succeeded in killing. They choke interoperability with DRM overkill. They shun open standards.

    Sony is the company that brought CD Rootkits to peoples homes. That wouldn’t have happened if they weren’t a Media company. In some corners consumer ill-will from that still lingers. They issues lawsuits against consumer through the MPAA/RIAA.

    I expect no consumer electronics innovation from a Media company that is interested in clamping down every novel use of Media unless they can find a way to tax it.

    If Sony wants to return to consumer electronics, they should first sell all their Media Assets, use the money to pay their debts, and start an innovation center, where they create new products without the overhanging concern that using media in a novel way is to be avoided unless it pays more taxes.

    • raja99

      Wow, I could not have said it any better.

      The one thing I’ll add is that from time to time, I hear people saying that Apple should get into the media business (the way that, for instance, Netflix is starting to). Given that Apple is about the only company whose DRM (in video and ebooks) is effective (i.e., *not* trivial to work around), I’d be seriously concerned that they’d stop making consumer-friendly hardware and software for the reasons you give.

    • Rich

      Talk about anti-consumer…the RIAA has to be the most anti-consumer entity ever created.

      • http://twitter.com/qka qka

        Although the MPAA acts like the RIAA’s identical twin.

    • Graham J

      Bang on. Sony can die and stay dead and it will be better for everyone.

  • jfutral

    I know I probably come from left field for a lot of people here. I work in the arts. I think a lot of what makes technology important has a lot in common with what makes art important, especially what makes certain technology companies and artist more relevant at certain times more than others. I think all tech firms these days should make a point of reading Michael Kaiser’s book, _The art of the turnaround_. Any company always has the chance to one back. But it requires having the creativity and intestinal fortitude to focus and implement. But that is always the point.

    Joe