Why Sony MUST produce its own branded hearing aids?

So far we have heard about the new strategy outline from the new CEO of Sony, Kaz Hirai. Among the announced strategies on March 2012, Sony made it clear it that one of the most important areas for further growth of the company will be medical equipment business. Prior to the announcement Sony acquired Micronics, a us based medical company which is involved in the research and development of near patient Point of Care devices for disease diagnosis, treatment monitoring and blood testing, and also provides comprehensive product development for third-party clients. Also, the medical foot prints can be recognised in their recent acquisition of So-Net as the wholly owned subsidiary of the company.

Although we have not heard much about the details of the medical strategy from Sony, but those acquisitions can give us an outline from the strategy of the company which can be summarised as a B2B business including developing a new range of high-tech medical devices for doctors, physicians and hospitals with ability to connect to each other thanks to the solutions that previously developed and implemented by So-Net.

Why Sony is WRONG while Apple is right?

A quick SWOT analysis on Sony can reveal that the company has been successful in design and development of the high end consumer electronics while business segment of the company has not been so successful so far. So the question is why Sony has not focused on medical consumer electronic devices such as hearing aids instead of B2B devices?

Now a day hearing aids are among the most sophisticated consumer medical devices which need a revolution in the connected and everything smart era. Today hearing aids can connect to the smartphones or TVs but indirectly. The revolution in smartphones provides a variety of ways to improve the hearing aids connectivity with different devices such as smartphones and tablets for example using the smartphone as a remote control for hearing aids or using the hearing aids as the headsets or many other applications and usages.

Again Apple found it first! Not surprisingly Made-For-iPhone hearing aids features were among the new features on iOS 6 by Apple.

10% of Americans are hearing impaired and the hearing impairment rates around the world are almost the same. So it seems Apple again got it right and tried to enter to a new and untapped market with a strong support from its hardware and software background.

Sony and its Android ambitions

Sony officials have made it clear that they want to be the first Android device maker in the world. The acquisition of Sony Ericsson was in aligning with this ambition and they wanted to make an integrated platform based on Android to make synergy between their devices.

While Apple is working with hearing aids maker to add hearing aids in its ecosystem, Sony can produce its own hardware and add it to its newly created platform based on Android.

Sony has everything to produce a range of sophisticated hearing aids that can make seamless and wireless connection to every electronic devices.

Sony is the only one which can overcome the visibility barrier

The last reason that can support entering to hearing aids business which is the most important in my view is the most important barrier of wearing hearing aids, their visibilities!

Yes the visibility of hearing aids is the most important reason that people do not wear hearing aids but what do you think about Sony branded hearing aids that look like headphones or headsets?

I think many hearing impaired would wear them because no one thinks that they are hearing aids!

Also Sony has a strong footprint on miniaturize electronic devices and may change the whole industry dramatically by making barely visible, good looking and wireless hearing aids.

Sony's Japanese rival Panasonic started to make hearing aids last year. However, Sony'd strong potential in making high-end portable devices and also stronger platform based on Android can make differentiation from Panasonic.

So if Sony wants to change only one thing in the world it can do it now or never!

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.

Techno Yoda insight: What should Sony do after acquisition of Sony Ericsson

It took too long to write the second part of "Why Sony should acquire Sony Ericsson" and today they just did it!
Now what is next and what should they do?
1- First and foremost, they should get rid of Sony Ericsson brand ASAP! Why? it is obvious ! No one is going to buy a discontinued brand! I think they have done this and that is why they just remodelled Xperia arc to Xperia arc S instead of  introducing Nozomi or any other dual core and more powerful phone for now. So we can wait for the Nozomi under Sony brand.
2- Sony needs more market share. During the years SE's market share has vanished. So Sony needs to think big. You might be too young to remember that long time ago HTC was flirting with Sony Ericsson to be bought by them! But now things are changed and HTC has overtaken SE . However, Sony should think about it seriously. Having HTC capacity in the side will bring more market share for them immediately. But it needs too much money as well. Will you lend some money to them?
3- Integrating, Integrating and MORE INTEGRATING. Sony needs to integrate its highly fragmented but rich territories. I think they are on the right path.They just need to make it more quickly. If they can bring Sony's entertainment capabilities such as music, movie, game, ebook, as a sub-ecosystem on the Android almighty platform,  It will equip them with a capable weapon to fight against Apple (iOS) and Microsoft (Windows Phone)  and also it may help them to differentiate themselves from other Android manufacturers as well.
If Sony could complete at least 2 tasks from the above, you should expect a bigger than Apple outcome!

Techno Yoda comments on forming of "Sony Entertainment Network": The endless path to integration with speed of a snail!

Among the most important IT news in September, introducing of the "Integrated User Experience" by Sony is the most interesting from the Techno Yoda perspective! So if you want to know why, please read this:

The "Integrated User Experience” named "Sony Entertainment Network" by Sony  which is going to combine two hacked services: "Qriocity" and "Playstation Network". In the other word, this can be perceived as the first phase of getting rid of those hacked brand by re-branding and integrating them into the new brand. By this integration Sony  gets rid of Qriocity completely by re-branding its services from  “Video On Demand powered by Qriocity” and  “Music Unlimited powered by Qriocity” to  “Video Unlimited” and “Music Unlimited" and also transforming the "Playstation Network" a.k.a PSN as a sub-brand of "Sony Entertainment Network". Also, this integration allows Playstation users to use the services provided under these brands (Qriocity and PSN) by one account as Kaz Hirai, probably the next Sony CEO, described it as: "The next evolution towards the goal of realising a single, global comprehensive network platform of all network services which will be accessible from one convenient account." which can be translated as integrating music and video on demand and also Playstation games together. But the question is what “all network services” means for Sony and is integrating music and video on demand with Playstation games enough for the company?

More than six years ago at the time of the historical appointment of Sir Howard Stringer, the Welsh-born US citizen and the first foreign CEO in the Sony’s history,   he vowed to integrate Sony's entertainment arms with the electronics to make synergy. Sony's entertainment industry can be seen as its core competence. However, the company has failed to use this core competence to fight its competitors such as Samsung so far.

Sony is providing several online services which can be seen as parallel lines which intersect each other in infinity!

Here are some samples:

•        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.
•        Playnow by Sony Ericsson which covers downloading mobile contents for Sony Ericsson mobile phones such as applications, games, ringtones, music , videos and wallpapers.
•        Reader Store which provides ebooks for Sony eReaders.

These are just some examples. Sony has several other network based services for its regional websites as well. It took six years for the company to integrate its music and video on demand and Playstation games together. So the estimation for integrating the other services is not possible easily!

Another interesting fact regarding the Sony Entertainment Network is its availability for Android devices. All Android users can download the app from Android Market and start using Video and Music Unlimited. So it seems Sony has not made up its mind about its network based devices strategy. While video and music on demand services are available for competitors’ devices as well, the new Reader app will be just available for Sony and probably Sony Ericsson branded devices. 
Techno Yoda believe that it is vital for Sony to integrate all of the online services together ASAP. Otherwise the  path to integration with speed of a snail would be a never ending voyage!

Techno Yoda special review: Why Sony should acquire Sony Ericsson. (Part One)

Background

On 17 March 2000, a ten minutes fire in a fabrication line of the Royal Philips Electronics radio frequency chip manufacturing plant in Albuquerque, New Mexico, caused supply chain disruption for many companies. Among them Nokia and Ericsson were two companies which faced severe component shortage. 40% of the capacity of the burnt factory was dedicated to Nokia and Ericsson.

Although Philips estimated that restoring the factory would take a week and assured top managers of both companies that their orders were in priority for Philips but they could not manage to start the normal operation in the facility months after that. Nokia found some alternative suppliers and could manage the crisis but the story of Ericsson was completely different.

Ericsson did not react immediately to the crisis. Top managers trusted Philips vows, neglected the situation and faced sever component shortage consequently. They could not develop new models or even produce their current models.

Six months after that the struggling mobile phone division caused $167 million loss for the whole company.  In July 2000 Ericsson started negotiation with Sony to merge their mobile phone business. The estimation was that Sony which was one of the leading companies in the consumer electronics sector can provide the joint venture’s components demand and also its innovation and experience in consumer electronics market can improve the position of both brands in the mobile phone market.   At the same time Ericsson started to downsize the mobile phone business and sold its several factories in Brazil, Malaysia, Sweden, the U.K., and the U.S to Flextronics. Finally Ericsson and Sony signed the memorandum of understanding in April 2001 and Sony Ericsson Company a 50-50 joint venture between Sony and Ericsson started in October 2001.

 A decade with Sony Ericsson, Collaborations and Rivalries between parents

Sony Ericsson demonstrated mixed performance during near a decade. The company did not achieve any profit for nearly three years from start and the parents invested another $500 million to the company during the period. However, the profitability was continued until the fifth birthday of the company when Miles Flint, Sony Ericsson former president, who was successful to convince Sony to allow using of two popular brands, Walkman and Cybershot, on Sony Ericsson mobile phones, announced their goal to become the third largest mobile phone maker in the world within five years, the position that Ericsson had before the joint venture. The company gained the third position on the third quarter of 2008 but failed to achieve profit.

Although there is not any public information regarding the financial transactions and/or terms and conditions of the agreement between two parent companies regarding using Sony Brands on Sony Ericsson products, since the W800i, the first Sony Ericsson Walkman phone, introduced in February 2005 at 3GSM congress in Cannes, it seems the allowance of using Walkman brand on Sony Ericsson phones granted by Sony before beginning of 2005, couple of months before appointment of the new CEO at Sony.

In June 2005 Sir Howard Stringer appointed as the first foreign CEO in the Sony’s history. His attitude towards the company’s joint ventures especially Sony BMG Music Entertainment and Sony NEC Optiarc in 2008 which ended up to acquisition of both companies by Sony, raised some rumours about the same action against lose making Sony Ericsson especially after Stringer’s interview with Die Welt in August 2008 which He mentioned that: “Buying out the a partner is never an easy thing.”  That showed his intention or maybe failed attempts to acquire the whole company.

About one month after this interview Sony Ericsson introduced its first digital photo frame, IDP-100, as rival to Sony’s range of digital photo frames. At the same time several photos from Sony Ericsson “PSP phone” published in the internet.

During the first years of his management, some symptoms of conflicts between two parents appeared. Although, Sony granted using Cybershot brand on Sony Ericsson phones on February 2006, couple of months after Stringer appointment, which can be considered as previous agreed plan between former CEO of Sony and Sony Ericsson, but until 2011 Sony did not allowed Sony Ericsson to use any other Sony brand. 

The weak performance of Hideki Komiyama, the first Sony Ericsson president which was appointed by Stringer to lead Sony Ericsson in September 2007 and was one of his closest co-workers of Stringer in  Sony USA, ended up to an exceptional swap in managerial roles between Sony and Ericsson in October 2009. Before formation of Sony Ericsson, both parents agreed that the president of the company would be appointed by Sony while chairman of the board came from Ericsson. This agreement remained unchanged until October 2009 when Sony Ericsson introduced the first CEO and not president from Ericsson, Bert Nordberg, and the First chairman from Sony, Sir Howard Stringer. That could be perceived as distrust of Ericsson to execution management of managers which was appointed by Sony, especially Komiyama. The company adopted Sony new revealed brand message “Make.Believe” instead and vowed the aligned collaboration with Sony.

 Android Focus

Sony Ericsson has focused on producing Android based smartphones, according to Bert Nordberg, The CEO and president of Sony Ericsson. But it seems Sony has big plans for Android as well. Sony has invested on Android based devices heavily. The company was the first TV maker which introduced Google TV equipped televisions based on the Google Android on May 2010. Also, Sony and not Sony Ericsson introduced two tablets based on Android which will be available from fall 2011. The company has developed an application for its e-book store for Android devices and more than that it is working on its dedicated platform named PlayStation Suite, to bring PlayStation games on PlayStation certified Android devices, which has three known members until now: Sony Ericsson XPERIA PLAY and two recently introduced Sony Tablets, Code names: S1 and S2. The recent update of Sony internet TVs allows users to control their TV via their Android base devices.  All of those actions clearly show Sony’s intentions to use Google Android as the main platform of its consumer electronics and entertainment products. In some cases Sony officials see Sony Ericsson as a rival. For example last year on December 2010, Sony’s head of TV division, Hiroshi Yoshioka, in an interview with New York Times, described the collaboration between Sony and Google on TVs “More” than “Sony Ericsson and Google on smartphones”.  So it seems Sony is really serious about Android.

Sony gets ready to acquire Sony Ericsson.

On 10 May 2010 Sony announced restructuring its business under two main cores: Professional devices and solution group and consumer product and service group. They also introduced the new division names VAIO & Mobile business group. The first products of the new group which can be considered as mobile devices were S1 and S2 Android based tablets.