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http://www.insanely-great.com/news.php?id=1755
The Economist: Sony Should Look, Listen, Learn from Apple
By Remy Davison, Insanely Great Mac
February 28th 2003
Consumer electronics giant faces myriad of challenges as profits fall.
Britain's Economist argues that Sony needs to learn from Apple, the company it argues
is "the teacher".
Sony remains focused on its major markets, such as Playstation, DVD and its Hollywood
movi studios. It has eschewed the AOL-Time Warner route of the 'bigger-is-better'
mentality, says the article. Instead, it has put its considerable size and resources
into increasing the company's level of vertical integration: through home
entertainment solutions, which span the PC, TV, games and handhelds. And, with film
studios and a stake in JSkyB, its pay-TV satellite partnership with Rupert Murdoch's
News Corp, it can stream that content into the living room.
Indeed, Sony's current chairman, can almost claim to have developed the digital hub
concept some years earlier than Apple's Steve Jobs. Convergence is what Sony calls it:
interaction between digital devices.
But despite its success, Sony's profitability is falling, a victim of competition from
rivals marketing less costly products. The problem is that while Sony innovates - by
letting its electronic devices talk to one another, for instance - this is 'mature'
technology, which can be copied easily by other firms. After all, anyone can build a
Walkman clone. Its new cell phones - jointly developed with Ericsson - innovate, but
their market impact is as yet unclear.
For The Economist, Sony needs to look to devices like Apple's iPod, the "Walkman of
the early 21st century". Design is important to both Apple and Sony, but the article
argues that Sony needs to free itself of some of the software shackles, such as MS's
Windows on its Vaios. To put easy-to-use software on its home devices, it will need to
forge alliances with open-source software developers - although it will be unable to
control them.
Analysis: This represents a major turnaround from the same magazine which argued in
1997 that Apple's business model was essentially flawed and that it would ultimately
collapse due to its poor market share and fundamental mistakes. As David Pogue argued
at the time, The Economist ignored the obvious alternative scenario: that Apple would
restructure and make a normal recovery, as many failing corporations do.
On the software front, who better than Apple to team up with Sony? After all, the two
companies have a long history together (the 3.5" floppy drive, the PowerBook 100). Who
knows software and ease-of-use better than Apple? Sure, it would cost, but at least it
would work out of the box. As it was meant to.
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