Sony’s Leadership Role in the Next Years Will Depend on its Capability to Innovate and to Differentiate

Some time ago we heard about the possibility of a Sony Windows phone and we said that one of the possible problems was the fact if Sony is ready or not.

Interesting news on the Verge and on Xperiablog begin to answer to this question and put some other aspects useful to understand what Sony was, is and probably will be.

Starting from the fact that Sony was an iconic brand in Consumer Electronics in the 80’s, simply think about Walkman, and the fact that it had some foggy time between the end of XX century and the beginning of XXI, some changes are highlighted and the possible strengths as capability of Sony to innovate as it made for sure in the 80’s seems again present in the Japanese Company that in the last years many times has been overcome by Korean giants as LG and especially Samsung.

Q2FY2013 results by segment

Sales and Revenue Q3 FY 2013 by Segment

Operating Income by Segment

We could start from Mobile sector, that is one of the driver of current Market in IT and CE and, If we see, brand and products named Xperia have part of the recent improvements in financial of Sony Mobile. Recently Kazuo Hirai (Sony CEO) speaking to The Nikkei said that he believes that Sony can double the volumes of smartphones to 80 million units in FY15 (year to March 2016), this challenging vision is helped by the numbers of last Q2 FY2013 report in which we can see a boost in the mobile segment sells to 418.6 Billion Yen from 300.4 confirming a trend began in 2012 even if the increase in Mobile segment was because the consolidation of Sony Mobile Communication AB formerly known as Sony Ericsson Mobile Communications AB. What is also very important the is the operating income rises from -23.1 to -0.9 Billion Yen and this is a clear improvement respect to the Q2 FY2012 in which the Operating income saw the value of -23.1 Billion Yen coming from -6.1 Billion (remembering  anyway the Sony Mobile Communication AB consolidation).

Xperia Z1 compact

As I said one of the important stuff is to innovate and differentiate to the competitors and we can see how Sony is moving on this way.

Regarding Mobile segment The Xperia Z1 Compact is a good example. In a world of flagship smartphones with ever larger display and with at least 5” (rumors about large screen are also for iPhone) Sony try to launch a smartphone with a display of 4.3 and not as other companies (as Samsung with its mini) nothing has been less than its 5” sibling.

Of course the trend and the news are not ended, as normal for a Mobile Phone manufacturer, and in fact there are rumors about the next flagship codename Sirius and Canopus. The Sirius handset should be a 5.2-inch device with a Qualcomm Snapdragon 800 processor and LTE  while Canopus should be a 5-inch smartphone with the latest Snapdragon 805 processor even if other sites  describes Canopus as Wi-fi only, we’ll see but a Snapdragon 805 processor device without cellular part is quite strange to me.

Another example of how Sony would differentiate its smartphone respect the others is the IP (Ingress Protection) Rating offered widely in its portfolio, especially flagships and not only for some dedicated and special series.

Z1 Compact is waterproof

What is interesting, again, are the rumors about of Windows Phone on Sony devices.  if it is right what Sony said about its interest to adopt WP only if it has the possibility to adopt it to its phones, a sort of customization Nokia-like, I think that it is a good approach. What that is not clear, at least to me is if MS agrees on this possibility. Before purchasing Nokia Mobile Phone division I would say that MS would agree without problems, but now are we sure that allows a potential and challenging competitor to make products better or at the same level of its production line?

Also cameras with the mirorrless offer shows Sony capability to innovate even if the financial results doesn’t reflect this yet, showing in fact a decrease in Q3 FY2013 of 8.2% in the Sales respect to the previous year same Quarter.

Handycam® FDR-AX100E

Despite the huge Samsung and LG sales in the last years respect to Japanese vendors, on TV segment for  2012 and 2013 Sony TV series, especially flagships, had several good reviews and the TRILUMINOS technology seems in the good way to replicate or at least emulate the success made with the famous TRINITRON in the last decades.

Last year 4K XBR900 series was appreciated as a very good product and this year at CES Sony presents in high end part the X95, X9 and X85 spanning from 49” to 85” all of them with TRILUMINOS and the X9 also with the speaker Magnetic Fluid that allows a quite good (or acceptable for the audiophiles) without huge or complicated audio systems or home theaters. The W-series with 1080p resolution this year is less high-end level than the past years but they could be anyway considered as “premium mainstream”. That 4K is a buzzword of these days it is confirmed also by the 4K Camcorder with 1″ sensor FDR-AX100/B presented in 2014 CES.

4K from Sony

In the last years VAIO brand even if not at the top in the selling of worldwide PC has been a well-recognized and appreciated brand and such brand could be used in the future Windows Phone devices (if any), even if, in my opinion, the Xperia brand for not business customers in my opinion is more attractive.  Probably it is possible that Sony is thinking about two series, one business (Vaio) and the other one more generic (Xperia),but… who knows?

Regarding Games sector, Sony at CES 2014 in Vegas showed good result with 4.2 Million units sold as of December 28th 2013 for its PlayStation 4, huge number compared to also good values of 3 Million units sold in case

So we could say that Sony is on the track regarding innovation and capacity to offer something of different respect to the competitors and for the Manufacture not dedicated only to low end segments is a must (did someone say Apple?). These facts are not probably sufficient for a worldwide success but without them I think that is very difficult to have it.

Asian Market feedbacks after day zero at Las Vegas CES

What about the stock exchange the day after the CES keynotes? Of course this is sort of joke but some aspects are anyway interesting.

Starting from the fact that Nikkei 225 showed -0.59% and Kospi Composite index +0.32% this morning we can see:

SAMSUNG Electronics Co., Ltd. (KRX:005935)

Samsung (KRX:005935) shows a decline of 1.22%. In this case I assume that the main reason is not related to CES Keynote and the products presented in Las Vegas but to the fact that the Fourth-quarter sales are less than expected and it looses something compared to Apple in the US and Japan.
Samsung@CES presented a lot of devices, from a 105-inch Ultra HD TV to an interesting Samsung’s Galaxy Note Pro 12.2 that in some way could anticipate what the rumors say about 12.9-inch Ipad Pro and introduces what could be the new paradigm for the upcoming Professional Tablets. Samsung at CES has also confirmed his “Smart” view on Home Appliances.

PANASONIC CORPORATION (TYO:6752)

Despite the fact that Panasonic abandoned the Plasma TVs that were the World best in class TVs of last year it has a rise of about 1.28%. From a financial point of view this could be reasonable due to the fact that the Plasma division in the last years has several losses. Anyway the fact that the Panasonic keynote expecially for the part related to new TV line has been commented not so enthusiastically, see e.g CNET . It shows that sometimes financial consideration could be too myopic and too focused to the near future, but we’ll see in the rest of the year and also we’ll see the technical reviews about the new Panasonic TVs both at 1080 and 4K.

SONY Corporation (TYO:6758)

Quite flat shares shape after Sony keynote that showed the new TV line with a great focus on 4K, the new Bravia HDTVs have also a new design shape. Japanese Company presented also a new “little” flagship, “little” because Z1 Compact, this is the name, has a compact form factor sporting a 4.3-inch display, in contrast with the latest display size approaches, even if with features and performance of the Sony Z1 flagship. Sony presented also a wereable sensor called Core, see e.g. Engadget’s hands-on for details.

LG Electronics Inc (KRX:066570)

For LG the market feedback seems more in line with the CES commentators’ acceptance. LG presented among other, an astonishing flexible 77-inch OLED UHD TV and a quite mature smart TV solution with LG webOS.