Sony: Had We Been Open, We Would’ve Beaten Apple

Sony is a company which is not exactly loved by technologists, despite the fact it has come up with some damn fine technology – with my personal favourite being the MiniDisc format. The problem with Sony has always been that it was stuck in the old ways of doing things (proprietary, closed, DRM), and of course things like the rootkit scandal didn’t help either. It seems like things are about to change, with Sony’s CEO announcing a new direction for the company – focussed on openness.

Sony’s CEO, Howard Stringer, consolidated his position of power earlier this year by also assuming the role of president of the company. In an interview with Nikkei Electronics Asia, Stringer makes some very open mea culpa comments. It’s an interesting interview.

Understanding customers

A quote that really struck me as evidence of common sense has to do with understanding customers. “We have to become a company that can open the window and say, ‘Look, we don’t just design technology because we love technology. We design technology because we understand that our customers are different,'” he said, “We can no longer say that we’re right and our customers are wrong. We can’t build only what we want to build.” Those are pretty interesting words coming out of a Sony CEO.

Gaming of course also makes its appearance. The Playstation 3 simply isn’t doing as well as the competition; I know countless people with XBox 360s and Wiis, but I know only one with a PS3, and he only has one because he received it as a gift when he switched mobile phone contracts. The PS3 is expensive and difficult to program for, which has hindered its adoption as a gaming platform, making it lag behind the Wii and the XBox 360.

Stringer admits that, and hints that understanding customers, and finding what he calls “hidden customers” is very important. “Understanding customers will also help us uncover hidden customers. The Wii from Nintendo Co Ltd of Japan is an excellent example. They didn’t develop any unique technology; they just realized that there was potential demand out there for something different from conventional games, and thought about how to satisfy different demands from different age groups,” he explained, “They attained results that the PS3 hasn’t; namely, generating profit from hardware sales.”

Even though the XBox 360 doesn’t seem to be making Microsoft any profits either, hardware-wise, it does ship far more units than the PS3. When asking around the gaming-inclined part of my group of friends, they all say the same: they’d love to buy a PS3, but they can’t justifiy the price difference between Sony’s gaming rig and the XBox 360. Wii owners are obviously a group apart.


If there is one word that summarises Sony, it’s “proprietary”. Stringer looks back upon the competition with Apple, and states that had Sony embraced openness, it would’ve beaten the Cupertino company. “Sony hasn’t taken open technology very seriously in the past. Its CONNECT music download service was a failure. It was based on OpenMG, a proprietary digital rights management (DRM) technology. At the time, we thought we would make more money that way than with open technology, because we could manage the customers and their downloads,” Stringer said, “This approach, however, created a problem: customers couldn’t download music from any Websites except those that contracted with Sony. If we had gone with open technology from the start, I think we probably would have beaten Apple Inc of the US.”

Openness is not the only area where Sony should’ve taken a different path in its competition with Apple. Sony’s software has always been a total disaster (and I’m being kind here, because I’m in a good mood), and Stringer acknowledges that a good user interface is just as important as a good price and openness.

Moving back to openness, Stringer claims that Sony is transforming from a closed system to an open one. He also believes that it doesn’t matter how many open technologies, content, and services there are to choose from. He tells the tale of a time when he worked at a US TV network, right around the time cable and satellite were introduced. There were only three nationwide US networks back then, and executives of those stated that three was more than enough, that customers couldn’t handle more choice.

“I was about 40 then,” he recalls, “And raised my hand to speak: “That’s not true,” I said. “The customer will always like choice. While it’s better for broadcasters if the world stays the same – that there will always be three networks – it’s going to change.” Four weeks later I was made an unexpected job offer. I was hired as president, replacing the man who had given the speech. If I had kept my mouth shut, I would have remained a journalist. And of course cable TV, satellite broadcasting and the like did develop, just as I’d anticipated.”

Whether or not Sony will actually make the transition it needs to make in order to stay relevant in the content business remains to be seen, but it seems as if Stringer at least has his brain in the right place. I’ve personally never had a bad experience with Sony, and very much like the various Sony products I own, but I do realise that the company needs to make some serious changes in its attitudes towards its customers.


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