“Those who cannot remember the past are condemned to repeat it.” – George Santayana, 1905
For today’s history lesson, we’re going to look at two of the biggest names in the tech industry that have risen and fallen in complimentary distribution with one another since the 1980’s.
As one company climbed to the top, the other plummeted but now the tides have changed.
I’m talking of course about Sony and Apple, two companies with storied histories that bare some key similarities to each other. In the successes and failures of each company, the brilliance and blunders seem to be passed back and forth. In order to move forward towards the future, we must look back at the past; so let’s take it from the top.
The 1980’s were a strange time in America; MTV, big hair, and the Brat Pack are some of the first things that come to mind when I think of that decade. Of course, the 1980’s also ushered in a new era of technology, and Apple and Sony were at the forefront. In the beginning of the 1980’s, Apple came out strong with a record breaking IPO and the Macintosh computer. Things quickly went south for the computer giant, as infighting and a decline in sales ultimately saw Steve Jobs leave the company in 1985; beginning what many would refer to as “the dark years” at Apple. During that same time, Sony had started the 1980’s with dismal profits during a global recession that saw a drop in electronics sales.
One of the things that saved Sony was its creativity and drive to pioneer new technologies. While it lost the “format wars” between VHS and Betamax, it was able to move past and eventually develop technologies such as the Compact Disc and Walkman. Similarly, it branched out beyond consumer electronics and got into the music and movie publishing industries; creating a revenue stream that would allow it to profit several times over from single products. Its latest demise, however, came from the company aggressively expanding into new businesses and technologies with little communication or collaboration between the departments. The question now is “Will they bounce back?”
Apple was able to bounce back from those “dark years” when Steve Jobs came back. Under his leadership, the company was able to re-focus and re-establish its brand. They were able to focus on creating great products from top to bottom, coupled with a user experience that was second to none. If Sony wishes to recover in the same way Apple did, then perhaps they’ll do the same. Sony’s reach is a bit broader than Apple’s so in order to do that, they’ll need to increase the communication and support between departments. They have all the parts they need to return to the top, they just have to deliver what the customers want. Apple delivered things that consumers wanted before they even knew that they wanted them. Sony’s approach as of late has been more stagnant, where they wait for something to come out and find a way to replicate it.
The sting of a few hard blows to a company can send it reeling and certainly bruise some egos. Sony needs to take a whiff of the smelling salts and come out of the corner swinging. Once they return to their roots of innovation, creativity, and quality they’ll be sure to see success once again.
Kelli Richards
CEO of The All Access Group, LLC
0 thoughts on “Sony’s decline: Have they eaten the poison Apple?”
Companies work hard to develop their products and services and in doing so they develop their corporate culture. These cultures are revered and protected. Individuals inside these companies are fighting hard to keep the company relevant with new ideas that become the new products and services. It is a fight because the corporate process protectors resist the change necessary to evolve. Sony failed to advance in software and setting market trends. How can the company that invented the Walkman walk away from the digital evolution of that product. Similarly where are the 12 disparate R&D labs that Apple has funded to assure their continued relevance. Why would Apple let major talent go for political reasons. Tomorrows’ success is granted to no one! It must be earned through continued relevance.
Inertia Is a Funny Thing or Why Not To Let A Lawyer Change A Tire
The abrupt shift of the popularity spotlight from Sony to Apple is best evidenced by the two companies’ iconic devices – the Walkman and the iPod. During the 1980’s, if you were to have a set of headphones on your head plugged into a device carried in your hand, it was a Walkman. Regardless of who made it – Panasonic, Aiwa, JVC, Sanyo – or what it was formally named or designated, in conversation it was referred to as a Walkman. Sony’s audio playing device made that much of an impact and made listening to media (granted, audio was the predominant form) personal and portable. Audio was transmitted via radio or cassette tape, and it needs to be noted the significance of cassette tape, since it was a medium that, while analog, was readily available and circulating en masse and could be used to record and replay just about any content from any source.
Please note and remember this, this is important.
At the backend of the 80’s, a new medium came on the scene and saw a tremendous upsurge in popularity — the Compact Disc (yes, it was around since 1982, but gained its popularity in the latter 80’s). As such, the Walkman evolved as well, spawning the Discman (despite the formal adaptation of the name, the device was still colloquially referred to as Walkman). Once again, the Discman (and all the other models produced by all the other manufacturers) made listening to audio personal and portable. It was during the 90’s, though, that a new format burst onto the scene with the dawning of the Digital Media age – the MP3.
I present to you that it was the MP3, and how Sony addressed it not from a technical standpoint but from a legal standpoint, that propelled Sony into Apple’s shadow. This is why you shouldn’t let lawyers tell you how to do innovation.
At the backend of the 1990’s (yes, the MP3 was around since approximately 1994, but it was the Nullsoft’s Winamp in 1997 that really got the ball rolling, with Napster bursting on the scene in 1999), people embarked upon the practice of taking their purchased audio CD’s, ripping them into MP3’s, all to either share them peer-to-peer and/or rearrange them to burn them back onto CD again (and thus, played on a Discman or similar device). The MP3 Player was in its extreme infancy (the MPMan by SaeHan IS and the Rio, both in 1998), and this would have been the ideal time for an innovative giant to step in and bring to market the defining device for this new medium (or format, if you will). All eyes turned to Sony…
But it didn’t come from Sony. It came from this quirky, enigmatic computer company named Apple in 2001, called the iPod. For all its well-documented and revered innovation (click wheel? white?), it had one fundamental feature that, while seemingly minor, made all the difference in the world — it supported the MP3 file format. Granted, it advertised and encouraged and celebrated the use of the new AAC format (Advanced Audio Coding… at one time, though, folks thought the first A = Apple), but it accepted, without hinderance, all those MP3’s that you, you Napster-holic you, had amassed during the 90’s.
So where was Sony on this? It is here that I must refer to Ms Richards’ article regarding Sony’s branching out into different departments and revenue streams. One particular division is Sony BMG; perhaps you’ve heard of it?
During the Napster vs. RIAA litigations (plural), instead of standing ringside to watch how the battle played out, and see at least how the market might play out, Sony BMG (specifically, the lawyers within) waddled down to the world-respected R&D division (I’m being harsh, they didn’t waddle, but surely did send a blizzard of emails) and said in so many words, “This MP3 format? Squash it. You were going to put it in the next variants of Walkmans? Kill it. You’ve got a new device called a MiniDiscMan? Uses this new medium you call MiniDisc? Projecting it so you can read/write/re-write upon it, and that the minidisc can move between platforms, that we’ll license, such as car, home, and computer audio (much like what the iPod now does today)? Sounds great, but there is to be no support for the MP3 format. It is crippling our Sony BMG interests and stressing our licensed artists.”
To be fair, I’m undoubtedly paraphrasing.
Conversely, Apple became a proponent of the blending of the MP3 and AAC formats (now, all MP3, MP4, M4A, AAC is pretty much the same) and instituted iTunes. It was within iTunes (specifically, the iTunes Store) that any DRM was applied, but iTunes still played, and allowed the transfer to iPod of, any MP3’s you had from any other source. I cannot emphasize this enough. Sony didn’t introduce an MP3-playing device until much too late in the game, and lost the most critical element in this vicious race — inertia.
I’m leaping over several other significant factors, but for the sake of this topic, it is this that propelled Apple’s marvel forward to the position in the cultural day-to-day such that when someone greets someone with headphones on the street, they say, “Hi! What are you listening to on your iPod?”