Sunday, April 15, 2012

Sony is toast

See my post Sell Sony, buy Samsung from 2005 for comparison. Where is Ken Kutagari these days? Younger people today probably can't remember a time when Sony was a technology leader.

In 2005 it was clear to me that Sony was in trouble and Samsung on the rise. I also knew OS X and the iPod were going to be very successful, but I had been conditioned by MSFT's success to think that mediocrity would continue to rule in PCs and other computer products. So I certainly didn't think Apple's market cap would reach its current value.

NYTimes: Sony ... is now in the fight of its life.

In fact, it is in a fight for its life — a development that exemplifies the stunning decline of Japan’s industrialized economy. Once upon a time, Japan Inc., not to mention Sony itself, seemed invulnerable. Today, Sony and many other Japanese manufacturers are pressed on all sides: by rising Asian rivals, a punishingly strong Japanese yen and, in Sony’s case, an astonishing lack of ideas.

... Sony’s market value is now one-ninth that of Samsung Electronics, and just one-thirtieth of Apple’s.

Even in Japan, where many consumers remain loyal to the brand, some people seem to be giving up on the company.

“It’s almost game over at Sony,” said Yoshiaki Sakito, a former Sony executive who has worked for Walt Disney, Bain & Company, Apple and a start-up focused on innovation training. “I don’t see how Sony’s going to bounce back now.”

... Japanese consumer electronics manufacturers “have lost their technology leadership in many areas,” Steve Durose, head of Asia Pacific telecommunications, media and technology ratings at Fitch Ratings, said in a recent industry commentary.

“Ten years ago, these companies were major technology innovators, the creators or leading developers of many electronic products and trendsetting devices such as televisions, digital cameras, portable music players and games consoles,” Mr. Durose said. “Today, however, the number of products remaining where they can boast undisputed global leadership has narrowed significantly, having being usurped or equaled by the likes of Apple and Samsung Electronics.”

... Sony’s woes hurt not just Sony, but also Japan. In the United States, new technologies are often developed by young companies not held back by their past. These upstarts eventually replace slow-to-adapt giants. But in Japan, no major electronics manufacturer has joined the industry’s top ranks for over a half-century. [Unbelievable! But isn't this also true for other sectors in most European countries?] And, though struggling, companies like Sony continue to lure some of the country’s top talent.

... Some analysts wonder if Mr. Hirai — who previously ran the money-losing games and TV businesses — is the right man to lead Sony. A protégé of Mr. Stringer, he appears to have been appointed as much for his ease in English as his management skills, analysts say.

“The bottom line is: if you want to be perceived as a creator of cool tech, you have to create cool tech. The challenge for Sony is that those examples have not been there, and they haven’t been there now for a number of years,” said Steve Beck, founder and managing partner at cg42, a management consulting firm that focuses on brand vulnerabilities at top tech companies. “The tarnish on their brand has definitely begun.”


David Coughlin said...

I have seen this critique of Samsung before.  There are lot of niggling things that distinguish Apple from Samsung.  It annoys me when I see the they-are-artless criticism, it's bullshit.  At a notional level, to me, there is only one difference.  Apple takes long-lead risks with long, uncertain payoff timelines.  It is fundamental and strategic. Samsung can't continue as an UltraBig, compartmented industrial company and also capture Apple's geist.  I don't know why they would want to.

RKU1 said...

Well, I haven't really been following Sony's history or its problems, but I've noticed all the recent NYT/WSJ/MSM articles suggesting that Sony has been doing disastrously badly in recent years.  This seems odd, since I have the impression that all the MSM articles I'd read during those same recent years had said nice things about Stringer, the Sony CEO, and gave him very high marks.  But if a company was strong and its CEO has been excellent, it's a puzzle for me to now suddenly discover it's fighting for its very life.

This is one of the reasons I've grown very cautious about believing anything I read in the major American media...

Robert Rota said...


Bob_Arctor said...

" This seems odd, since I have the impression that all the MSM articles I'd read during those same recent years had said nice things about Stringer, the Sony CEO, and gave him very high marks. "

Good ol' boychik network.

Matthew Carnegie said...

"Is design innovation i.e. the art of the business more a reflection of V and value transference, while technical innovation i.e. the science of the business, more a reflection of M and S and actual value creation?

Skeptical of the the value of the theroretical basis (if this is the case, it should be reproduced across all forms involving visual design - is that true?).

And of course (at the risk of repeating myself), finance is mathematical and about transfer of value in all directions, not necessarily to yourself.

All that said, assuming that verbal abilities are useful for design, a few models on how language abilities might matter to design (because it's like a flame to a moth for me):

1) Language helps with understanding another person's subjective perspective (thoughts, feelings, emotions), thus helping with "user friendly" design. Linguistic skills allow designers to "transfer value" more effectively to users, by understanding what they want. 

I think that's quite dubious, but the cold and affectless traits of psychopathy seem to be associated with higher perceptual abilities relative to verbal abilities, while women with higher empathizing abilities and lower systematizing abilities and psychopathy relative to men also tend to have higher verbal skills, so that's at least something in that direction.

2) People with autism tend to have an advantage with Block Design when presented with unsegmented block designs, but segmented designs and also have advantages in picking out embedded figures.

Assuming the Enhanced Perceptual Processing theory of autism is true, maybe folks with lower perceptual abilities are more likely to try and break interfaces down into more segmented and less embedded setups they find easy. 

This may be a lot of what is meant by "good" user interface design - making interfaces that have low perceptual loading and complexity.

(There's a theory that autistic traits are more common in IT specialist populations through enhanced perceptual abilities allowing more intensive way interface use without fatigue

Not necessarily better *at* simple and clear design, just more likely to. See Greg Cochran's idea of "emulating normality", "it may be easier if one never thinks of anything too complicated in the first place, rather than having to weigh the level of difficulty of every sentence and concept... one would have to be a lot smarter than average to effortlessly simulate normality, particularly in real time."

3) Higher linguistic abilities might also help in and of themselves in terms of visual design.

On the Raven's Matrices test, one of the reasons it may track g quite well is it draws on a mix of the strengths that an IQ battery's subtests test for*, and has visuospatial and verbal-analytic items (I personally wrongly first thought about it as a visuospatial test and made a lot of assertions on Steve's blog to that effect - although I still wouldn't call it a "pure" reasoning test). 

The verbal-analytic items seem to rely on forming verbal rules and categories which are then applied to the visual information to solve the problems. 

So linguistic abilities can help with at least some problems which are visual in nature, through good ability to make and use language rules organizing visual information. Interface design might be like this (at least relative to other kinds of technical design).

* - " The more you report having autistic traits, the better you are at the visuospatial items.  This result fits nicely with the enhanced perceptual processing theory of autism.  It also provides more evidence that Raven’s matrices load highly on g because the test is a package of many kinds of intelligence test.".

**'s - for examples of the two kinds of tests.

Matthew Carnegie said...

Btw Yan, having a quick search for "artists spatial verbal scientists" seems to suggest that artists have a distinct visual-object ability strength, oriented around the qualities of static objects, distinct from verbal strengths and the spatial strengths of artists (objects moving in time), although maybe more correlated with the latter. I've not looked around much at it, but you have an interest in "thinking in pictures" so may be of interest to you. 

Also seems like there is some competition between object and spatial visual abilities (perhaps at a different hierarchical level to competition for resources by verbal and visuospatial processing regions) - "Across five different age groups with different professional specializations, participants with above-average object visualization abilities (artists) had below-average spatial visualization abilities, and the inverse was true for those with above-average spatial visualization abilities (scientists). No groups showed both above-average object and above-average spatial visualization abilities. Furthermore, while total object and spatial visualization resources increase with age and experience, the trade-off relationship between object and spatial visualization abilities does not."

Populations with generally boosted perceptual abilities (e.g. autistics) may have more of both. Might help explain how the Ashkenazi Jewish population are not (as per report) particularly strong in visual arts, but are both strong in the hard sciences and writing, perhaps because they've got a combination of reorienting their visual abilities relatively away from these object focused abilities towards spatial abilities (allowing their math and physics dominance) while boosting verbal abilities greatly as well.

Kevin Rose said...

Japan, and Asian economies in general, are going to be in a bind in the coming decades. None of this is really about the technology, which is fairly simple and basic stuff, and has been around for quite some time now. Nothing really special going on on the technology front - just minor incremental advances as the result of the collective labor of multiple countries. Some of the higher level technological drudge work can be done by countries like South Korea, and the low level stuff can be done by China with its teeming hordes. But its all pretty basic stuff, nothing startlingly new or creative. 

Japan never really did anything novel, but just built really high quality stuff. But it seems lots of other countries have caught up. Even the walkman was just a tweak of an existing technology. And the iPod and other Apple products hardly represent massive technological revolutions - the technology they are based on has been around for some time, and was a pretty incremental and inevitable evolution from other technologies. No, Apple was an intellectual accomplishment of a completely different stripe, a stripe that will become increasingly important in a world where few really new technologies are created but instead incremental evolutions - taking place across multiple countries - that seem almost inevitable will be the order of the day.What Apple did - and which is the the real intellectual and imaginative challenge in a world of little genuine technological creativity - seems to be to take these existing technologies and add an extra and hitherto undreamed of dimension to them - an aesthetic dimension, or an *experiential* dimension, or even in simply grasping the possible uses we can make of existing technologies and the ways in which they can transform our lives, which is no mean feat of imaginative insight but something that often requires genius. Whether the Asian economies can compete in such a world remains to be seen. But the old model of just making really good quality stuff of existing technolgies - with the occasional incremental tweak, like the Walkman - or in the case of South Korea, of specializing in adapting existing technologies to the creative vision of others, like Apple - such secondary roles no longer seem able to catapault countries into the very first rank.

DukeofQin said...

So basically what you're saying in far too many words is that in an technologically undifferentiated market, slick marketing reigns supreme.

Kevin Rose said...

Indeed, just as a technologically undifferentiated market, Michaleangelo was merely a triumph of slick marketing. I remember reading for my history class a pamphlet issued by the Guild of Paint Mixers and Marble Quarriers of 15th century Florence that it was theirtechnologically sophisticated methods of extracting marble from quarries and mixing pigments that was the true intellectual triumph - Michaelangelo was just an upstart who grabbed all the headlines.

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