Sony Cutting 10,000 Jobs to Save TV Division

[admin]

A report came out of Tokyo yesterday stating that Sony intends to cut 10,000 jobs in an effort to turn around its TV business. Now, there are a couple things to note in order for this news to really have much context. First, Sony has been losing money in its television segment for 8 years (that's how long the division has technically been "in the red"). Secondly, 10,000 jobs represents a full 6 percent of Sony's workforce - worldwide. It's not uncommon for new CEOs to clean house - after all that's why they were hired, but incoming CEO and President Kazuo Hirai is really shaking things up. He outlined this new business strategy at a press conference where he tied the announcement to a commitment to bringing back Sony to profitability in the television market they once dominated (remember the reign of Trinitron TVs?).

Discuss "Sony Cutting 10,000 Jobs to Save TV Division" here. Read the article.

 

[wiyosaya]

IMHO - if Sony keeps its price's at a premium, I think it will hurt the company further. Many manufacturers are competing from a quality standpoint. As I see it, Sony's trivially higher "quality" does not justify their high prices. At this moment, I'm looking forward to the Samsung and LG OLED TVs. Sony had a chance to enter the OLED TV market, but instead produced a way over-priced and way undersized OLED TV in the XEL-1 which was, obviously, a niche market product. I saw an XEL-1 in person, and while the picture was nice, it was underwhelming in size. Perhaps I would have been willing to pay $200 for it, but certainly not $2,400.

Back in the 90's, COMPAQ went through a similar premium pricing battle in the PC market. Along came cheap knock-off PCs that were easily just as good as the COMPAQ models, and down went COMPAQ. As I see it, what happened to COMPAQ is a valuable lesson for company's like Sony, however, Sony has yet to learn the lesson.

The last thing I'll rant about is that in my opinion, Howard Stringer is completely to blame for the current dire straits in which Sony finds itself. I think he should divorce himself from Sony entirely. It was Stringer who gutted the TV division, and ditched another great product line in the "ES" series. Those cuts, IMHO, are why Sony is no longer a technology leader. It sounds like this new guy has some sense in trying to restore Sony to the status of a technological leader, however, these job cuts worry me in that it sounds like something Stringer would have done.

I wish Sony well, but time will tell.

 

[SnowmaNick]

Premium pricing from a large volume mfg. is a risky strategy, even if your products are universally declared "the best" in their segments. Look at Pioneer. People are still trying to produce plasma's that are as good as the Kuro, years later. That didn't matter, Pioneer had to close its TV division.

TV's are basically fungible goods. Some are better, and some are cheaper, but if a mfg tries going outside of the price range, even with excellent products, name recognition and reviews, their going to tank.

Hopefully Sony realizes that if they want to stay in the TV game, they need to make good to great products, and the margins are very thin. Cost cutting is part of that, so maybe there is some hope for the company, but lets see where they price their products next year.

 

[wreckastow]

Sony Nostalgia

For me, Sony is a nostalgic brand, and historically high quality in regards to older technology, specifically the Trintron/XBR aperture grille stuff. I still have and use a their old HDTV CRT, the Sony KV-30XBR910 I got in 2004. I bought it because it was on "sale" ($1300) and knew that it would be one of the best CRTs ever made before they would cease production. Again, nostalgia, but also performance with regards to picture quality, on a smaller screen. The black levels were and are still amazing. CRTs didn't market their black level ratios like flat panels, they used the infinity symbol. Nothing on the market back then could touch that black level without an outrageous price tag. I had only one problem with the power board and had it fixed for $300. These old Sonys can be diehard tanks which are serviceable.

That being said, this old technology is heavy. A 150 lbs. TV is no joke.

I would say Sony has not bridged that legacy with newer technology. Their flat panels remain over-priced, and most consumers are going with cheaper options. The market is extremely competitive and flooded with consumer options. How will Sony TVs stand out and be unique? Who will they market them too? Hi-fi a/v geeks? The average family? To professionals in the entertainment industry? All of the above? A quick look at their official TV website does not impress me. All those dumb, trademarked, psuedo-science marketing terms have got to go. "Motionflow" or "Super Bit Mapping" (that's an audio noise-shaping term and they're applying it to video quality?). What about "OptiContrast"? Kinda sounds like Optigrab from Steve Martin's The Jerk.

Sony should have Audioholics, their peers, and technical professionals from major companies endorsing their products for real, scientific merits, not marketing gimmickry. They need to get out into the trenches. They've been in the ivory tower too long to have to cut 10,000 jobs. Yikes.

 

[markw]

Well, I hope one of them was the idiot I got on their support chat line a few weeks ago. I needed to know how to enter alpha characters with a remote from their BH-S390 (which I do like).

She kept saying/typing "press the ABC button" and asking if the keyboard was displayed. When I repeatedly said there was no button labelled "ABC, she told me to keep looking, it's there. After about ten minutes of this insanity and my asking for someone else, she said I would have to call the "real" support line.

When I finally got through to someome after waiting in the queue, that person quickly understood what I saying and said that the "ABC" button is what they called the round button in the middle of the four arrow buttons surounding it.

Problem solved in about 30 seconds of talking.

Yeah, they could do without people like that.

 

[Audioholics]

TV's are basically fungible goods.

The only people I know who use that word are economists - come on, fess up!

wreckastow - good points. What I find odd is that their new ES line is actually borderline "smart" in how it lets you configure your system. If Sony went the "Apple" route (ironic, since Jobs often touted Sony as his inspiration years ago) it could use HDMI CEC, etc to make its own products really, truly unique in how they self-configured. Better yet, they could put some R&D into making sure they self configured with other components as well. How cool would it be to have a TV and receiver that auto-detected your BD Player, Cable/Sat box and pre-programmed the remotes for you? Or integrated everything into a simple OSD remote with hardly any buttons?

They have the capital to do this, but instead they are making higher-priced TVs that aren't necessarily higher quality than the competition.

In other areas they are ahead of the curve, but TVs and AV receivers seem to be a sore spot for them.

 

[wiyosaya]

For me, Sony is a nostalgic brand, and historically high quality in regards to older technology, specifically the Trintron/XBR aperture grille stuff. I still have and use a their old HDTV CRT, the Sony KV-30XBR910 I got in 2004. I bought it because it was on "sale" ($1300) and knew that it would be one of the best CRTs ever made before they would cease production. Again, nostalgia, but also performance with regards to picture quality, on a smaller screen. The black levels were and are still amazing. CRTs didn't market their black level ratios like flat panels, they used the infinity symbol. Nothing on the market back then could touch that black level without an outrageous price tag. I had only one problem with the power board and had it fixed for $300. These old Sonys can be diehard tanks which are serviceable.

I've a 24" Wega I bought in 2000 that I am still using mostly because I have been waiting for a technology to appear that is as good or better than CRT.

...
I would say Sony has not bridged that legacy with newer technology. Their flat panels remain over-priced, and most consumers are going with cheaper options. The market is extremely competitive and flooded with consumer options. How will Sony TVs stand out and be unique? Who will they market them too? Hi-fi a/v geeks? The average family? To professionals in the entertainment industry? All of the above? A quick look at their official TV website does not impress me. All those dumb, trademarked, psuedo-science marketing terms have got to go. "Motionflow" or "Super Bit Mapping" (that's an audio noise-shaping term and they're applying it to video quality?). What about "OptiContrast"? Kinda sounds like Optigrab from Steve Martin's The Jerk.

In my opinion, you have hit the proverbial nail on the head with this, and I think the problem is wider than just Sony. Marketing departments, as I see it, seem to manipulate people who have little knowledge in areas such as technology: Many companies use buzz words in the product names and marketing schemes because it attracts people who unfortunately do not recognize that they are being fed a plethora of meaningless words.

To me, this phenomenon extends to other industries as well. Take the industry that shows their vehicles driving in a mountainous scene on snow with no roads in sight giving the impression that such a vehicle will climb a mountain when almost no one would likely ever drive in the depicted terrain. Excepting for brevity, I would name other industries that rely on phantasma to promote their products, and I see this phenomenon as a problem because it relies on at best partial truths to manipulate the commercial's audience into thinking that they have to have the product; hey, it has Motionflow technology, and I have it too.

It is not only advertising. It is also other industry "specialties" like customer service. A relative of mine was slammed onto TW's phone service, and TW removed a phone wire from the existing connection so that the phone could not be easily returned to that connection without replacing that wire. When I called TW to complain, the CS rep claimed that they would never do that. Interestingly enough, when the TW rep started to realize that I know what I am doing, he eventually said, "Everything I have been saying is supposed to calm you down, but it is making you more aggravated." Duh, Yeah! When you are telling me that your techs "Don't make mistakes" and trying to play a confidence game, I should think so.

Sony should have Audioholics, their peers, and technical professionals from major companies endorsing their products for real, scientific merits, not marketing gimmickry. They need to get out into the trenches. They've been in the ivory tower too long to have to cut 10,000 jobs. Yikes.

Personally, I think part of the problem is that there is no industry standard means for measuring some things such as contrast. If there were, measured contrast ratios from different manufacturers would have some meaning. That is not to say that a standard would solve all problems as some standards have little merit. I like Joe Kane's interpretation of what NTSC stands for:

Never Twice the Same Color

 

[SnowmaNick]

The only people I know who use that word are economists - come on, fess up!

LOL, close.

My BA and MA are in Econ, and my MBA has a finance specialization.