Floundering Sony Aims to Stem Losses, Reboot to Old Glory

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By Erik Pineda | November 6, 2012 4:37 PM EST

The tech world constantly produces winners and losers with some twists. The dominant forces of yesteryears now found themselves struggling and barely surviving, which analysts said is the current state of Sony.

In the 1980s, the Sony brand was synonymous to iconic products such as the Walkman, the first commercially successful portable music player, and the Trinitron television set, which for decades set the standard for enviable viewing technology.

The Sony of today is but a shadow of its past glory as the Japanese consumer electronic firm is hobbled by operating losses for the past eight years, no thanks to the gradual dulling of its edge and its failure to introduce attractive but affordable gizmos.

The last time Sony inspired excitement among global consumers was when the firm rolled out the Walkman, which morphed to Discman when compact discs became the prevalent mode of playing music.

But technology is forever evolving and the behemoth that it was, Sony was left behind. Its music player was annihilated by rivals, chief among them by Apple's iPod and its successive iterations, courtesy of the late Steve Jobs, who once upon time marvelled at Sony's engineering prowess.

And then Samsung came in, its relentless onslaught eventually toppled Sony's TV business from the top, with the slide being felt worldwide. In Australia, the once mighty Sony television brand had slowly but surely lost its lustre.

According to Channel News, Sony's grip on the Australian market has been whittled down to over eight per cent while Samsung reigned supreme by wolfing down more than 50 per cent of the national demand. And the once proud Japanese brand was not even second, that's where LG, another South Korean competitor, landed.

Putting into perspective on how lowly the Sony name has become as far as Aussie consumers are concerned, one major retailer told SmartHouse: "Consumers no longer walk in asking for a Sony TV. It is all about LG and Samsung."

The former number one was not exactly a technology laggard. Its conviction that its products were premium led to higher sticker price for TV units so buyers trooped to the alternatives - delivering the same viewing pleasure without breaking the bank.

That has been the norm for the past eight years and Sony consistently bled from its TV business, accumulating for the company losses of close to $9 billion and forcing CEO Kazuo Hirai to downgrade his global TV sales guidance to 15.5 million units.

Amidst the daunting task of turning around Sony's TV figures, Mr Hirai laid out plans to win back old Sony believers and gather new ones. His tack involves streamlining of the Bravia models and concentrating on further development of the OLED (organic light-emitting diode) technology that would allow Sony to manufacture thinner and lighter units without any compromise on quality.

Despite strong suggestions from experts and investors alike, Sony will soldier on with its television business while opening up new frontiers, with Mr Hirai arguing: "Sony has a very deep DNA in creating the best picture and the best sound."

Sony will have to confront more challenges and endure periods of financial losses prior to regaining its old self, analysts said, and investors are carefully monitoring the path for recovery plotted by Mr Hirai.

They will likely return if and when Sony had convincingly shown that it is far more ready to tussle in equal terms with the new breed of competitors currently holding sway in the market.

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