Why Is Sony Going under and How Can It Save Itself?

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One of the most iconic names in the mobile industry has always been the Japanese giant, Sony. Over the years, we have seen this company going from an icon, to an evil empire going after poor developers (yeah, yeah… different division), to one of the most friendly giants a developer could hope to have as a friend. Over the last couple of years, Sony has shown the developer world (and really the entire world) that being a ginormous global corporation should not prevent you from keeping in touch with the people who have helped to make you big in the first place. You can be friendly with lesser groups (us :p) and you can also do simple things like play by the rules (ie following GPL as they should). However, it seems that the old saying “good guys finish last” does hold some truth to it. Unfortunately, a few days ago, a report came out stating that Sony is considering selling their phone division. This comes out not long after Sony’s sale of their laptop computer division. So, it seems that Sony is trying to trim down the fat in order to survive. But, is this the right way of surviving?

According to various reports floating around on the web, Sony will have lost roughly US$1.9 billion dollars this coming March, which is a ridiculously large amount for any company trying to make a living by selling… well, anything. Now, Sony is a company that has branched out into so many areas that “Jack of all Trades” falls short in comparison. They do have some rather profitable areas such as their Playstation division as well as their cameras. When it comes to TV’s, they are getting their behinds handed over to them in a silver platter, courtesy of Samsung and LG. And of course, you have other areas such as Sony Music, which will keep the brand alive for the foreseeable future. However, this alone is not enough to keep the entire company afloat.

As mentioned earlier, they axed their Vaio division not too long ago due mainly to dismal sales and increase in competition in markets where they had some levels of dominance. Acer, Asus, Lenovo and others began pushing out cheaper products, which basically pushed Sony into a corner. On top of all this, the former Ericsson division, which was completely acquired a couple of years ago by Sony, has been currently trying their hardest to look alive. Multiple device releases per year with a yearly flagship, new innovative tech (submersible devices, screen tech, and more) have been paramount for them since the introduction of the Z line (and even a little before). Despite all their efforts, the company seems to be giving up as it simply cannot win against the likes of Apple and Samsung, both of which dominate the markets worldwide with vast percentages.

Focusing solely on their phone division, it is actually not hard to see why they are where they are right now. After quickly browsing through the 4 major US carrier’s websites, one can tell what is going on. Out of the 4, only two of them offered Sony devices (T-Mobile and Verizon). Each one of them offered 1 device (each) – the Xperia Z3 (and Z3v for Verizon) whereas they offered about 9 variants of Galaxy devices and 6 others of iPhones (and a slew of other brands including HTC, LG, etc). They have 0 penetration in the US markets as their only other outlet would be to sell unlocked directly from Sony stores or via other venues such as Amazon, eBay, etc. And yes, we do realize that the US is not the only nor the largest mobile market in the world, but it does represent a very large portion of it.

The other issue with Sony’s model revolves around their support structure. This, as it is always the case, is a typical scenario for ymmv (your mileage may vary). Some people hate them and you do also get the mixed stories about successful repairs with minimal to no hassle. However, if anyone browses through their support forum, they will quickly realize that they are not exactly all that great. And since there is never a second without a third, you have the issue (which beautifully magnifies the effect of the support issues) of build quality concerns. Point and case, did you know that the first generation Xperia Z‘s processor heated up so much that it warped the glass back and unset the glue holding it together? Well, whether Sony admitted it or not, the issue was there with lots of reports and they flat out denied it.

So, Sony… you have the trifecta of death unfortunately: low sales, poor customer support, and quality issues. How to fix this? Well, obviously marketing would do you wonders mainly because people cannot buy your product if they do not know it exists. You are in the money losing wagon at this point and I don’t believe you will outbudget Samsung or Apple in marketing dollars. But, as a last resort, I would try one final push, going out through the big door, going all out, etc, etc. You have to somehow convince the people that you have better bang for their buck, which brings me to my next point… price. Most of your devices (newer ones) hit the shelves grossly overpriced (when compared to your competitor’s flagships for instance). Stop doing this! There is no worse buyer’s repellent than overpriced hardware. Also, own up to possible mistakes. You’ll look better in the end by admitting that there may be something wrong than trying to deny the existence of a sheet with over 700 entries of people reporting the same issue. And no, water cannot get past a water indicator without activating it (true story btw, I actually got this from Sony techs after sending my Xperia Z in for water damage which had gotten in through the warped glass in the back, which they graciously denied to repair or replace).

I am not sure if you will be able to save the phone division, but taking the steps above might throw you a line to survive a bit longer. Who knows? You might even be able to beat HTC or even LG by bringing some of your mid range devices into the US market as well, thus breathing some life into those deep red numbers of yours.

If you were in Sony’s shoes, what would you do? We’d love to hear your thoughts.