Zhao Tong: The Fall of the Sony Empire (III) Defeat of Waterloo

Sony corporation announced in February this year, and from July, Sony's TV division became an independent subsidiary of Sony's consolidated accounts from sony's parent, and sold the computer division to Japan's state-owned subsidiary (japan industrial partners, jis). Televisions are one of the most important products in Sony's products, known as "Sony's face". Why would Sony do this? In fact, the reason is very simple, Sony's TV division has been losing money for 10 consecutive years, and the deficit of the TV division in 2013 reached 25.7 billion yen, which can last for ten years, which should be said to be enough to give face, if in the United States, this is unimaginable.

Why did Sony's TV division fall to such a point? To answer this question, we have to start in the 1990s. Before the popularity of LCD TVs, picture tube televisions were the mainstream of the market, and the trinitron brand televisions developed by Sony were the leaders of picture tube televisions, especially the right angle flat tube television "wega" swept the world and became another representative product of Sony after the Walkman. However, after entering the 1990s, the world's electronics industry experienced a revolutionary technological innovation from analog to digital technology. Digital technology converts all information into 0/1 signals, avoiding the problem of information loss and loss caused by information transmission and replication. In the TV industry, product development has also turned to fpd (flat panel display, flat panel display), Sony's competitor Panasonic has made large-scale research and development and investment in pdp (plasma display panel, plasma display), Sharp has carried out large-scale research and development and investment in LCD (liquid crystal display, LCD display), especially the late-developing Samsung has not only invested in pdp and LCD, And its investment is far greater than that of other competitors. At that time, Sony already had the technology of lcd, however, the decision-making level adopted an attitude of ignoring the trend of technological change. Sony believes that PDP and LCD are only transitional products, the technical content is not high, as long as large-scale investment can be produced by anyone can produce mass consumer products (commoditization), the next generation of real strength technology should be organic electro-luminescence. Sony's initial investment mistakes can be seen as business strategy mistakes, but from another point of view, legacy problems have affected Sony's investment. In 1992, Sony built a new picture tube factory in Pittsburgh, USA, and in 1997, it underwent a large-scale expansion of the factory, according to the calculations at the time, the recovery of these investments took about 10 years. These past investments have undoubtedly influenced Sony's decision-making judgment.

However, history made a big joke about Sony this time. After entering the new century, due to the large-scale investment of competitors, the price of pfd TV sets has dropped rapidly, and the demand for pfd TVs by general consumers has also exploded, in addition, the research and development of organic el has encountered technical problems that are difficult to break through and cannot be commercialized, resulting in a serious shortage of Sony PFD supply. Qiao Woman was difficult to cook without rice, and finally in 2003, she and competitor Samsung Electronics jointly produced LCD screens.

After Sony released "WeGa" in 1997, the TV division reached its peak. No one would have thought that just 5 years later, the light of yesteryear would suddenly become a heavy burden, and Sony TV would go a long way of no return. The reason why Sony did not completely abandon the TV division is probably for face or to preserve Sony's brand. In the case of a strong enemy (Samsung) in the front and a chasing soldier (a Chinese company), Sony's abandonment of the TV department is a helpless move, but it has no choice.

In the case of Sony's failure on LCD TVs, we can find that decision-making errors and bad luck can bring a fatal blow to a company, and even a leading company will taste the bitter fruit of defeat in a short period of time. A Sony executive once admitted that the investment decision of FPD is very fatal to Sony. Mistakes in decision-making are fatal, of course, but for multinational companies like Sony, there will be no total collapse of the TV sector if they know how to make up for it. Attentive readers may find that for almost 10 years after the trend of TV consumption became very clear in 2003, why did Sony not change its strategy in time? This may be the real reason why Sony encountered Waterloo, and it is also the fundamental reason why many other Japanese companies have suddenly become eclipsed in recent years, and we will continue to discuss it with you in future series.