Inventors and business observers who are used to hearing managers talk frankly and openly about the decisions they made that worked out -- while being somewhat less willing to chat amiably about those that didn't -- might want to check out a Jan. 20 story by Yuri Kageyama of The Associated Press. In the piece, Sony (NYSE:SNE) Computer Entertainment President Ken Kutaragi, a man who may eventually run the Japanese giant, admitted the company was slow to get into the MP3 player business, costing it sales.
Sony is right back in the game: Its Network Walkman product line fits right in there with offerings from Apple Computer (NASDAQ:AAPL), Creative Technology (NASDAQ:CREAF), Dell Computer (NASDAQ:DELL), and others. But there's no denying that the company, which has long succeeded at making its name synonymous with whatever must-have digital device is in the market -- "iPod" has become the new "Walkman" -- hasn't done so with its MP3 product line.
The reasons why are what's instructive. The company, Kutaragi said, was slow to react because it is a media company -- music and movies -- as well as an electronics manufacturer, and some managers feared that the media divisions might suffer because of rights and copyright concerns. Straight-up device makers such as Apple, meanwhile, didn't have such issues. (Heck, Apple was even criticized in some corners for its use of marketing that arguably made light of the "piracy problem.")
Sony has apparently now decided that its caution was mistaken. When the company could have innovated, according to Kutaragi, it instead hesitated. "We have to concentrate on our original nature," he was quoted as saying. "Challenging and creating."
In the past that's meant risk-taking: Sony hasn't exactly blown 'em out of the water with its MiniDisc players, an interesting but unwieldy product line that came at a difficult time in the market's evolution, but it did manage to out-Nintendo Nintendo by putting a PlayStation (and a PlayStation 2) in every pot. When Sony is "on," its marketing muscle and reputation for solid, if not spectacular, style, quality, and value can create and dominate mature markets, repeat business, and massive scale.
Sony believes it can retake some ownership of the next generation of consumer electronics with its PlayStation Portable, a combination handheld game and music/movie machine that is currently available (and selling well) in Japan only. If Kutaragi is right and the company is once again leading -- which, in the long term, is not the same as being first -- then betting against the company seems downright foolish.
For more:
Fool contributor Dave Marino-Nachison doesn't own any of the companies in this article.
