UPDATED 08:23 EDT / NOVEMBER 14 2011

Sony’s New Vision of the TV is a High Risk, but Necessary Move

In this period we call PC era, we as consumers have been fed a lot of amazing products.  Things that we never imagined would be possible 10 years ago are actually here – who would have thought that an ordinary TV could be transformed to something that can be readily connected to the internet?  Thanks to the wonders of technology, connected TVs are now par for the course.

The CEO of Sony, Howard Stringer, sees the potential in connected televisions, announcing last week that they are developing a new kind of TV.  This innovation is needed to stay in the game, in hopes of bringing back the television market.  Competition has become intense among TV manufacturers, especially with the rise of mobile devices.  So what can a manufacturer like Sony do to take the lead?   Leveraging the power of the web, Sony and its rivals are finding ways to differentiate their products.

“TV manufacturers, driven by their desire to rack up market share, have bred an intensely competitive market.  As a result, they are scrambling to come up with a new generation of TV sets that will separate them from the pack and command premium prices” says Stringer.  “There’s a tremendous amount of R&D going into a different kind of TV set.”

“We can’t continue selling TV sets [the way we have been]. Every TV set we all make loses money.”  Stringer added.

Sony is touting its four screens strategy to compete with Apple’s smooth content sharing and networking feature between Apple devices.  In addition, the strategy aims to integrate Sony’s HD devices such as TVs, smartphones, tablets, and PCs.  The Japanese electronics giant has spent 5 years building the platform, with a goal of competing with Steve Jobs’ vision for Apple connected devices.  With Sony’s own string of setbacks, the company hopes to climb back as a serious challenger to Apple.  Sony has already announced last month that the Playstation Vita will hit Europe and US by February 2012 after its launching in Japan mid of December 2011.

This is a high risk move on Sony’s part, but a necessary one nonetheless.  Aside from its low market share, the company continuous to lose money on every single TV unit it sells.  But with its decision in breaking up its TV unit comes the opportunity to allocate its funds and investment more effectively, reacting to a market that’s less reliant on home theater systems for content.


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