What's Happening to Sony? (The Rise and Stagnation of Sony)

you are watching ColdFusion TV [Music] hi welcome to another ColdFusion video previously in the last episode of the story of Sony we saw how they went from a flailing company making rice cookers and electric blankets to an innovative group of engineers who influenced American society with the breakthrough portable radio today we'll continue the story from 1960 with a fine line of Sony's global rights let's begin in 1960 Sony would expand into the United States with the formation of Sony Corporation America shortly after this using the transistor technology that they had perfected five years earlier Sony would create the first transistor television the context TVs of the time was still huge because they were using massive bulky vacuum tubes mm so Sony's model was a revolution much smaller than anything that had ever come before in 1968 so you would release the Trinity on TV it had twice the brightness of regular TV of the day and was the greatest TV product series of the entire century these Trinitron televisions were known for their great quality [Music] the Trinitron TV system was so good that it supported Sonia's growth for the 30 years after its launch in 1968 before they're all Japanese products are seen as cheap and low quality so you need color TVs change the perception of Japanese products [Music] 1975 saw the release of Sony Betamax I'm video tape format and camcorder the Betamax tapes system was far superior to JVC's VHS released later that year but it ultimately failed as it had less tape running time and was more expensive in 1978 a Sony executive would take a trip to Europe to see a spin-off technology of the Philips laserdisc that could play audio Philips and Sony already had a healthy relationship since the late 60s and decided to pair up Philips was a world leader in optical video discs and Sony had considerable expertise in digital audio signal processing technology when the two companies joined forces they would create the digital audio discs now known as the compact discs it would be released in 1982 in July of 1979 Sony releases the first stereo cassette player called the Walkman it is considered one of the most iconic music players and has sold over 400 million units of course their portable music players before the Walkman but Sony's was the first that was easy to use and convenient you really feel the music with the Sony Walkman Sony Walkman is a tiny stereo cassette player with truly incredible sound [Music] put on a Walkman and see the world and our whole new life the Walkman the Sony Walkman assured in the company's golden age it created a brand new culture of listening to your own personal music outside in late 1982 the first CD player was introduced to the world by Sony and just three years later in 1984 that would create a portable version it was called the discipline Sony were on fire by the stage and according to cultural critic Stephen Bailey in this period Sony was the apple of this day and much more by the end of 1988 Sony had acquired CBS records for three billion dollars and renamed it Sony Music Entertainment and also Columbia Pictures Entertainment [Music] 1993 would be a year that would change the gaming landscape forever in November of this year Sony Computer Entertainment was established and one year later the phony PlayStation was released it was the first video game console to ship more than 100 million units the year 2000 kicked off with the release of the Sony Playstation 2 it went on to become the best-selling home console of all time the next year Sony would establish its own bank and Sony Ericsson mobile now known as Sony Mobile 2004 for the release of the PSP to compete with the Nintendo DS and the PlayStation 3 would come two years later in 2007 Sony would innovate yet another world's first product the first OLED TV 2011 would see the PlayStation Vita and one of the first 4k TVs two years later the PlayStation 4 would be released and in 2016 for PlayStation VI heads that was launched according to one patent consulting firm sony has 366 patents for virtual reality all these achievements over the lifetime of the company and nothing short of remarkable but as some spectators are noticing Sony has been stagnating a little the company's sales haven't been what they used to and the clarity of their direction is little muddy let's take a look at some reasons of why this is happening just quickly before we get to the company itself we should take a look at the background environment saini was facing when they started to falter in 1990 there was a devastating economic recession in Japan it was caused by a shift in the nation's demographics and faulty central banking policies the Central Bank of Japan loaned too much money pushing up asset prices until it all finally burst in 1990 this resulted in rampant stagflation in the country wages fell prices stayed stagnant and businesses struggled it was so bad that there's a name for it it's called the lost score or the lost 20 years because of this recession Sony had to replace full-time staff with part-time staff and job security became scarce during this time of uncertainty and low staff morale sony had to start fighting off strong industry competition from a rising South Korea Taiwan and China the question must be asked why did these countries suddenly rise well in the 1990s and 2000s the global electronics industry experienced the structural change after the PC and internet revolution the industry began to standardize parts and outsource production and assembly work to companies in low-cost emerging economies this was cheaper and more efficient on a macro scale meanwhile most of Sony products were still being made in Japan which had a higher cost in the manufacturing pipeline than its competitors all of a sudden Japanese products for expenses compared to the emerging manufacturers when questioned on why he didn't want to drop prices Sony Chairman Akio Morita said we are selling diamonds at the time this was true as many products were of high quality in the early 90s but eventually the other manufacturers got better at their craft and the quality of their products improved suddenly there wasn't all that much distinction to justify Sony's high price the next issue for Sony began in the year 2001 this is when hardware manufacturing began to make room for the endless applications of software it began with the iPod a device that uniquely music enthusiasts tied into a software like never before amazing little device for the thousand songs and it goes right in my pocket do you remember what it was like when you got your first Walkman remember that feeling when he's sitting you gotta first walk in your hand in tightly Wow well I am picked up any mp3 player that hasn't made me go Wow okay I want to carry this wherever I go this is the first thing that makes me to feel Wow okay but this particular trend really accelerated from the year 2007 with the iPhone with this Apple achieved a breakthrough innovation enhance it it allowed users to expand the functionality of their phones three applications developed by engineers and even individuals worldwide so how did Sony respond w key I'd a president of Sony during the early 2000s reacted by trying to comply in Sony's audio and video technology departments with its IT departments I'd ace data that he just couldn't do it the company was simply too big although he was aware that those are need to shift Sony's business strategy he could not change the mindset of all 140,000 employees and managers the top leader is not a person with supernatural powers he said during this time I'd a even considered acquiring Apple in an effort to save himself sony has recently streamlined its operations focusing less on audio and visual manufacturing unfortunately according to one executives who spoke with The Times of Japan quote now that many excellent workers have left Sony as a result of structural reforms the company's power of innovation has declined sharply end quote in the sphere of manufacturing Sony has been outmaneuvered by the Koreans Chinese and Taiwanese in fact in the early 2010 most of Sony's profits actually came from their financial services and not their manufacturing operations in 2013 it was so bad that some investors suggested that Sony's had just abandoned their hardware division and just stick to making financial loans even the entertainment area of the company has taken a hit it's fallen into a two-way tie with paramount as Warner Brothers surges past in addition to this the Xperia phone brand have had disappointing sales and a backlog of sourcing issues and this isn't to mention that Sony is getting steamrolled in the TV department by Samsung in short today the Sony is losing ground everywhere it's simply too large too diverse in its categories and focused too much in the sub brand names with all of that being said it's not all bad though in late 2016 Sony started to turn around the smartphone department was losing money all throughout 2015 but did manage to post a reasonable profit in 2016 they did this by streamlining the phone product range cutting costs and focusing harder and premium phones with profitable margins while identifying better target markets with this being said this doesn't mean that Sony's phones are doing well versus the rest of the market Samsung Apple and the Chinese brands still largely dominate the brightest spot for Sony is a PlayStation 4 it's doing very well selling over 17 million units in fiscal year 2016 the strength of the ps4 has helped only reach its full first year of profit in three years the PlayStation 4 was so good that it amounted to 78% of all profit in q1 of 2016 the mother bright spot is Spain's digital camera division and also their smartphone sensor division Sony's smartphone camera sensors are used in other popular brands like Apple Samsung LG Motorola oneplus one and of course the Sony Xperia range there's also talk of a new Sony smartphone camera that can shoot Full HD at get this 1,000 frames per second so now that we've seen how and why Sonia's began to falter what are some solutions some analysts say that Sony needs to break from its past by completely transferring its existing businesses to overseas or even separate companies in a bid to create innovation since the PlayStation was so successful perhaps they should double down on that and focus on that segment things like partnering and content creators to make even more killer games for the ps4 line as well as some intuitive and addictive VR titles could really provide some growth doubling down on differentiation with their smartphone camera line does also have some potential all-in-all as we've seen time and time again on cold fusion this is a common problem for companies there Rises meteoric but when they become too large and diverse management becomes more fragmented and often bureaucratic and it becomes difficult to see what the next clear step is usually when this happens increasing competition creeps up from behind to steal some plunder in conclusion the future of sewing is hanging in the balance right now they've arguably been stagnating for over a decade but in the last year the company has been starting to sew some promising glimpses of hope ultimately we have to wait and see how they react to the environment moving forward that being said if there's anything that was learned from Sony in the last sixty years from the previous video is that that's got a very innovative DNA so a Renaissance is a possibility anyways that's what we'll leave a story of Sony today hope you enjoyed that I found it quite an interesting history to go through and kind of analyze whether been starting to falter if you're new here don't forget to subscribe to this channel and I also want to thank all of you for helping you pass a million subscribers I should have a little thank-you video coming out soon oh yeah if you want to see the previous video of the origins of Sony which is a fascinating story I think you really should watch that if you haven't already I'll leave it in the link below and also an end card at the end of this video but yeah anyway this has been to gogo you've been watching cold fusion and of course I'll see you again soon for the next yeah these guys have a good one cold fusion is he thinking [Music] you

Channel: ColdFusion

Views: 1,715,032

Rating: 4.8858738 out of 5

Keywords: Coldfusion, TV, Dagogo, Altraide, Technology, Apple, Google, Samsung, Facebook, Tesla

Id: eSHgFkYEb2o

Length: 14min 32sec (872 seconds)

Published: Tue Feb 21 2017