What Sony needs is a flat panel Trinitron
Tags: Marketing, HDTV, LCD, Plasma, Sony
Today's Wall Street Journal notes that Sony reported weak earnings yesterday because of its TV business's poor business performance. The onslaught flat panels has been particularly hard on Sony because it invested so much marketing and energy in rear projection systems. With a price war raging in the sexiest products -- that is, flat plasma and LCD TVs, Sony's non-flat technologies just haven't been able to command the premium prices Sony needs to keep its business healthy.
Undoubtedly, new Sony CEO Howard Stringer will be looking at how to improve Sony's performance in television. But from a marketing point of view, what Sony needs now is a home-run product such as it had with its Trinitron-based TVs in the 70s and 80s. And while it has made valiant attempts to innovate in television with its Qualia line of projection TVs, the company is fighting the trend of flat technologies like plasma, LCD, and next year's SED. Given that Sony hasn't invested in the large scale plasma manufacturing that Matsushita has, I'd put my bets on Sony trying to make LCDs with picture quality significantly better than plasma. That's a tall order, but it is what it needs to do to succeed in this cut-throat business. And while Sony's brand carries a lot of value, that value is declining without amazing products to sustain it.
One final observation: the article did note that Sony was planning to take steps to reduce costs. Specifically, the company announced plans to build more of its TV components itself as a way to revive its profit margins. That's refreshing to hear given the mad (and in our eyes penny-wise and pound-foolish) rush to outsourcing we've seen in American business. It looks to us like Sony wants to create success the old-fashioned way: through proprietary research and dogged development. The only question is whether it has the time it needs to succeed.
Today's Wall Street Journal notes that Sony reported weak earnings yesterday because of its TV business's poor business performance. The onslaught flat panels has been particularly hard on Sony because it invested so much marketing and energy in rear projection systems. With a price war raging in the sexiest products -- that is, flat plasma and LCD TVs, Sony's non-flat technologies just haven't been able to command the premium prices Sony needs to keep its business healthy.
Undoubtedly, new Sony CEO Howard Stringer will be looking at how to improve Sony's performance in television. But from a marketing point of view, what Sony needs now is a home-run product such as it had with its Trinitron-based TVs in the 70s and 80s. And while it has made valiant attempts to innovate in television with its Qualia line of projection TVs, the company is fighting the trend of flat technologies like plasma, LCD, and next year's SED. Given that Sony hasn't invested in the large scale plasma manufacturing that Matsushita has, I'd put my bets on Sony trying to make LCDs with picture quality significantly better than plasma. That's a tall order, but it is what it needs to do to succeed in this cut-throat business. And while Sony's brand carries a lot of value, that value is declining without amazing products to sustain it.
One final observation: the article did note that Sony was planning to take steps to reduce costs. Specifically, the company announced plans to build more of its TV components itself as a way to revive its profit margins. That's refreshing to hear given the mad (and in our eyes penny-wise and pound-foolish) rush to outsourcing we've seen in American business. It looks to us like Sony wants to create success the old-fashioned way: through proprietary research and dogged development. The only question is whether it has the time it needs to succeed.
posted by Carl Howe at
2:51 PM
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