When I was growing up, my Dad used to say, “Neil, stay humble. In your case it will come in handy.” He’d chuckle, and after a few years when I started grasping what he was talking about, I chuckled too. Because what he was warning me about was complacency, and arrogance.
As my Irish Mom used to chime in as well, “as soon as you start thinking you’re all that, you’re all done.”
All of this brings me to Sony (NYSE:SNE) (and I bet you thought I’d never get around to a point). It wasn’t too long ago, Sony was all that – and that much more. It all but ruled the electronic world. Remember the Sony Walkman? It was the go-to music device, until a company named Apple (NASDAQ:AAPL) came up with something called the iPod.
And remember when Sony had the coolest games? Well, its PlayStation is hardly a shrinking market violet, but it now has to play in a much more crowded sandbox, increasingly dominated by the likes of Microsoft’s Xbox and Nintendo’s everything else.
Even on the television front, Sony has had to cede ground to Samsung, Panasonic, and a host of cheaper players out of Asia, some of whom appealed to buyers with novelties like curved screens on the upper end, to deeply slashed prices for less souped-up screens on the lower end. And there’s Sony – stuck in the middle.
The irony is that Sony still makes great stuff, and for many technology critics, at least, way-ahead-of-the-curve stuff. The company’s new line of ultra-high definition, so-called 4K televisions, for example, represent a remarkable feat, and the company’s proprietary 4K server, an instant one-stop-electronic-shop for all cutting edge 4K television technology.
But apparently cutting edge doesn’t cut it. Just like Sony’s critically acclaimed phones don’t cut it. It’s Apple and Samsung dominating the upper end of the smartphone market and a whole bunch of cheaper Asian manufacturers gobbling up the lower end. And…you guessed it…poor Sony stuck in between them, and now just stuck, period.
Sony now expects a record $2 billion annual loss, and for the first time in more than 50 years, it’s shelved paying dividends. Never mind only a few months ago Sony President Kazuo Hirai was forecasting a 50-billion yen, or $466 million loss for the fiscal year that ends March 21, 2015, the bigger issue is how things could deteriorate so much, so fast.
Again, it’s not that Sony doesn’t still innovate. To hear industry analysts tell it, the once mighty Japanese electronics giant isn’t innovating in the right areas, or at the right speed. The fact that the company is writing down the value of its battered smartphone business says a lot about the electronic global party on which it’s missing out. Apple and Samsung seem to be the ones fighting over what our own Lizzy MacDonald has called a costlier slice of an even costlier pie.
That’s not to say Sony doesn’t have plenty of goodies it can still leverage. Remember that it remains something of an entertainment content king, and its vast library of music and movies something even Apple and Samsung might envy.
The problem is Sony hasn’t yet found a way to piece them all together. It’s sort of been the industry’s version of “waiting for Godot” – all the ingredients are there, but the recipe’s still not remotely there.
It’s an amazing conundrum for a company that used to be the one giving “others” conundrums. But perhaps the seeds were planted way back then as well – such as in the early 1980s, when Sony’s critically acclaimed “Betamax” videocassette standard was usurped by Panasonic’s far less praised VHS format.
Ironically, Panasonic latched onto the deals with movie studios that legitimate movie giant Sony all but ignored. So coming out the gate, Panasonic had built-in VHS content and partnerships, while Sony’s Betamax only had great press clippings and reviews. We now know how that battle turned out, and in retrospect, how apocryphal it would later prove.
Yet if Sony sensed the error of its ways, it certainly didn’t show it. Call it arrogance, or benign indifference to simple market forces. But it’s pretty clear now, Sony enjoyed ruling the technology world then, even as its very leadership was unraveling.
It made light of Apple’s iPod, dismissing this odd new gadget’s ease of use as a gimmick that would never replace the physical convenience of tape. Sony might have learned something from that experience, but apparently not enough, or fast enough. It’s all over these curved televisions with some eye-popping offerings of its own, but some fear it’s once again late to a trendy party. Again, this doesn’t mean Sony’s curved 4K sets aren’t eye-popping; for some darn reason, they’re just not consumer-popping.
I’m not smart enough to know why – could be the price, could be others simply feature other cooler gimmicks. All I do know is the company that pioneered the very home technologies that have become commonplace in homes around the world is increasingly being replaced by other technologies and other gadgets in all those homes around the world.
For Sony, this has got to be a humbling moment. No wonder its CEO was so down when he formally spelled it all out. How can you be cocky when you’re not all that anymore?
Maybe because you were too cocky for too long when you were? Lesson learned – fame is fleeting. Take it from Sony – enjoy the good times. Just don’t assume you’ll always have those good times. It’s sort of like success it – relish it, but don’t “act” like it.
Maybe that’s what my Italian Dad was getting at when he tried to keep my ego in check – check the clock first. Life comes with an expiration date none of us knows, but so many of us forget. Like a snap shot. Once snapped, then shot.