Innovation deficit.
Sony is distancing itself from the soon-to-be-legacy television and personal computer markets, in a effort to play catch up in the mobile device game. The company that redefined color quality in the 1970s is spinning its television business off into a separate subsidiary, and is selling its Vaio computer brand to a Japanese corporate restructuring specialist. It’s a response to what it calls “drastic changes” in the global PC industry…
Sony has determined that the optimal solution is to concentrate its mobile product lineup on smartphones and tablets and to transfer its PC business to a new company.
Five thousand employees – 3% of its workforce – will be cut over the next year. Even so, the company expects to lose a billion dollars in its current fiscal year, which ends in March.
The company is also predicting that it will sell 40 million smartphones in that period, missing its previous forecast by 2 million units. That’s enough to keep Sony in the sub–5% market share club, and well down the list at that. The latest rankings from IDC have Samsung and Apple accounting for nearly half of global smartphone sales at 314 million and 153 million annual units respectively, followed by Huawei, LG and Lenovo at just under 50 million units each.
Sony built its brand on quality and innovation, arguably launching the mobile device industry with the introduction of the Walkman in 1979. While its reputation for quality continues, Sony has followed – not led – market trends for the past twenty years. It certainly needs to jettison TVs and PCs, but even more it needs to rekindle its creative magic in order to survive.