Sunday, February 26, 2012

Techno Yoda insight: A big question for Kaz Hirai, How to connect Sony's separate Islands together?

Sony just hold its very first press conference at the mobile world congress in Barcelona. The company celebrated the acquisition of Sony Ericsson by introducing two new smartphones, Xperia P and Xperia U. Both phones inherited the same design as Xperia S and Xperia ion with different hardware configurations as well sizes. In this post I am not going to analyse the introduced smartphones, but I am going to evaluate Sony's strategy.The first thing that comes into the mind is changing the name only. 
Sony has not integrated previous Sony Ericsson into the whole company. Its just changed the name from Sony Ericsson Mobile Communications AB to Sony Mobile Communications AB with the same headquarters in London and even the same CEO and president, Bert Nordberg, who was he host of the press conference tonight.  So this shows the minimum change within the company.Also it seems there is no change in the company'd strategy. Sony is using the same way that previously experienced and failed in Sony Ericsson, producing the same looking phones with different specifications and sizes! Xperia P and Xperia U are completely similar to Xperia S in design but they have different specifications. But how come? It is obvious that Sony Ericsson has not been successful especially in recent years. The company has lost its market share dramatically behind its competitors from market leaders such as Nokia, Samsung and Apple to the newcomers such as ZTE. Does the company think that they do not to have to change anything and can go straight forward to the success without any change? I don't think so!

Sony is one of the most innovative companies in the world but its strong weakness is the company's structure and internal communications and collaborations between departments.
Lets have a look at the company's different islands at the MWC 2012, As it mentioned Sony Mobile Communications is one of the biggest exhibitors at the congress but what about other small islands. For instance FeliCa Networks, Inc, which is another wholly-owned subsidiary of  Sony and is providing contactless IC card technology is at the congress as well. They also had an announcement regarding the partnership with NXP  " to Create a Unique NFC Radio Controller Interoperable with Global Infrastructure" But why Sony did not mentioned anything about FeliCa in its press conference? Why they did not share their stands together instead of act as different and independent entities? I bet many of audiences even do not know that is any relation between Sony and FeliCa! But Why?
That's the old bad habit of Sony to make independent companies which do not collaborate with each other effectively. That is why Sony with the valuable archive of Music from Sony Music company and being the pioneer of portable music player lost its position to Apple iPod. 
If Hirai which is going to be the new CEO from April wants bigger portion of market share and also mind share pie, he should integrate mobile business into the whole company and try to DELIVER the integrated user experience within all devices (smartphones, tablets, TVs and even music player, camcorders and cameras) not only talking about that.
Finally, delivering integrated user experience without having applications in the portfolio is kind of useless. Sony has managed to put together music, video and game in its Sony Entertainment Network (SEN) but there is still a big dark hole in its portfolio, applications. Previously Sony Ericsson tried to provide applications and mobile contents through its Playnow service and also its dedicated channel in Android Market. As Android now is the main platform for Sony which is using in its smartphones, tablets and even TVs (equipped with the Google TV), applications and contents can be provided through a unique channel and it seems SEN is the best place to provide them to consumers along with music, video and games.

So this is the only way for Sony to use its core competences against competitors, otherwise the company will be transformed to something like Panasonic today:
Huge but unprofitable!





Monday, February 06, 2012

Techno Yoda insight: The "Integrated User Experience” a tough but promising task for the new Sony CEO


Sony is practically starting to gather its online services under the Sony Entertainment Network, SEN,  umbrella. Effecting from 7th February 2012, Sony Playstation Network, PSN, IDs will be transformed to SEN IDs. In September Sony announced its new "Integrated User Experience” strategy by introducing the Sony Entertainment Network and revealed its plan for combining and re-branding  its two hacked services Qriocity and Playstation Network under one roof, SEN.
Now it seems the strategy is progressing to the practical phase and at this stage the company is unifying more than 77 million user IDs of the PSN users with the current SEN IDs. However, The PSP users are not included at this stage. This will allow users to have access to the other SEN services such as Music Unlimited and Video Unlimited channels of the SEN with their unified IDs. In other word, through this change SEN will gain more than 77 million new users instantly! This number of users is lagging far behind more than 200 million users of iTunes, but it can be a good start for SEN.

The change is taking place ahead of the PS Vita launch and also the top management changes on April.
On Wednesday February 1, 2012, the Japanese giant, named Kazuo Hirai as its new president and CEO, succeeding Sir Howard Stringer, The Welsh-born American Citizen and the first foreign (Non-Japanese) CEO of its history.
Stringer’s right hand and one of the “Four Musketeers” who is promoted to lead the loss making giant has different and huge challenges ahead. Apart from the $2.9 bln loss and the ailing TV business, he should take care of the “Integrated User Experience” for network enabled devices including TVs, tablets, Walkman music players and specially smartphones to fight the rapidly growing iTunes, which has been one off the most important success factors of iPhone and iPad and can be a huge threat for the future of Sony. iTunes enables users to download music, apps, games, ebooks and more while SEN will provide music, video and game downloads and on demand services.
Apart from Sony customers, some of the multi-platforms supporting SEN services will be available to other manufacturers’ Android based devices as well. Consequently SEN is targeting wider range of audiences than iTunes which is dedicated to the Apple products users.
Although the new strategy for the SEN has covered three main pillars of the company’s entertainment services, it has not suggested any solution to provide ebooks and apps yet. Also, integrating other online services of the company under the SEN has not yet been announced. Apart from the current online services provided by SEN , Sony is providing several other online services such as:
  •      Reader Store which provides ebooks download services for Sony eReaders and tablets.
  •       Playnow by Sony Ericsson which covers downloading mobile contents for Sony Ericsson mobile phones such as applications, games, ringtones, music , videos and wallpapers.
  • Myplay by Myplay.com which provides video, music, photo and mobile download related to the Sony Music’s artists such as Jennifer Lopez, Britney Spears, Usher, Justin Timberlake, etc.
  • Online services provided by Sony Pictures such as trailers and mobile games download.
  • Sony Online Entertainment (SOE), which provides online games and entertainment.


These are just some examples and Sony has several other network based services for its regional websites as well.
Bringing all of these services under SEN roof is a challenging and difficult task but if Sony can make it, it can be a huge threat for Apple and its iTunes.