INTO THE NEXT STAGE: Despite Sony’s Hard Times, Still Keeping the Faith

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GEORGE TOSHIO JOHNSTONBy GEORGE TOSHIO JOHNSTON

There’s an apocryphal story in my family that once, many, many years ago, my late Uncle Akihiko gave my parents some unasked-for advice: Buy stock in an up-and-coming Japanese electronics company he was hearing about.

This was when, however, Japan’s postwar economy was still on the rise and that country was perceived in this country as a place that made inexpensive, low-quality products. Junk, in other words. There was no way my dad was going to put any of his meager enlisted man’s salary into a Japanese company. He wasn’t the sort to buy stocks anyway.

Furthermore, I don’t think my uncle ever bought any stock and made a fortune from this particular company, either. While he wasn’t poor when he died in the late 1980s, he sure as heck wasn’t wealthy. So much for heeding one’s own advice

Incidentally, that company, according to family lore, was Sony.

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Much has happened over the decades since Sony was born in ashes of Japan’s WWII defeat. In many ways, Sony was like the postwar poster child for Japan’s growth and stature beyond its borders. Its early products, like transistor radios and tape recorders, gained market share and earned a good reputation inside and outside of Japan.

Sony Cd player

Sony had been firing on all cylinders when this early portable CD player was released.

While we never owned Sony stock, we did own a Sony reel-to-reel recorder. When I was a kid living in Ohio, we exchanged tapes across the Pacific and heard the voices of our cousins in Japan, and they heard us. That was pretty advanced stuff back then!

Its portable black-and-white televisions also became popular, but it was the Sony Trinitron color TV that, for my money, made Sony’s reputation. We take clear, stable TV images with decent color for granted now, but there was a time, when color TVs first hit the market, that they weren’t very good, if the Zenith we owned was any indication.

A few years later, when we got a small Sony Trinitron, however, it was fantastic. Even though the screen was smaller than the Zenith, it was the preferred TV to watch. The color was good and the picture stable, although we still had to actually stand up and walk to it to change a channel. Oh, the humanity.

What Apple is now, Sony was then, coming out with innovative, culture-changing electronics like the Betamax home VCR, the Mavica digital camera, the compact disc (with Netherlands’ Philips) and, of course, the Walkman personal cassette tape player. I got one of the original Walkmans after high school, thanks to Uncle Akihiko. (In terms of functionality, a new Apple iPhone has most of the aforementioned features of Sony’s best products — plus much more — built in.)

At the height of Japan’s economic power in the late 1980s, while still under the leadership of co-founder Akio Morita, now deceased, Sony also acquired CBS Records and Columbia Pictures, both of which became part of the larger Sony Music Entertainment and Sony Pictures Entertainment. Both purchases shocked the world; it seemed to some, who probably had more than a streak of xenophobia, not to mention racism, that Japan Inc. was taking over the world. Not quite.

A 1968 Sony TV.

A 1968 Sony Trinitron.

Over the next few years, Sony would come out with the PlayStation videogame console and the Blu-Ray videodisc. Not only that, when its Columbia Pictures released the first “Spider-Man” movie in 2002, it wasn’t just a bona fide one-hit blockbuster; Sony had a profitable franchise in its back pocket. Why Sony didn’t, at the time, buy Marvel Comics — which it probably could have purchased outright for cheap, despite all the legal headaches — and thereby own all of its characters, is something I’ve long wondered about.

But there were so many missteps, from my perspective, that Sony made. Its insistence on proprietary audio formats when MP3s were becoming the rage. Putting the equivalent of malware on CDs to prevent piracy. Making Howard Stringer its CEO. Not embracing new technology the way it should have. For Sony, in retrospect, its best days were behind it.

Nevertheless, since debuting a little less than a year ago, its PlayStation 4, the latest version of its popular gaming system, has proven to be a hit vs. Microsoft’s Xbox One. Also, its movie and TV studios have, over the years, usually provided steady profits for the parent company. Also, its digital cameras are among the best in the world, rivaling offerings from Nikon and Canon.

While the music side isn’t doing great, with the overall state of the music business being what it is, Sony is probably quite happy it paid for Columbia Pictures now, despite huge recent layoffs there.

But despite those few bright spots, Sony is ailing, having experienced a major slide in it electronics businesses in recent years. Last week in its quarterly earnings report, Sony said it expects to have a full-year loss of $2.15 billion and that it won’t pay shareholders a dividend for the first time since it went public in 1958. (That must have been around the time of my uncle’s advice!)

According to the English-language news website of Japan’s Yomiuri Shimbun, Sony’s electronics business has “been in the red for three consecutive years.” Sony attributed its dismal showing to losses from its smartphone division. It’s No. 3 worldwide in smartphone sales — but when No. 1 and 2 are Apple and Google’s Android-based smartphones, that doesn’t quite equate to bronze medal status. Anecdotally, I don’t know anyone with a Sony smartphone — but I know plenty of people with Apple iPhones and Samsung Galaxy phones.

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Now, I’m finally about to take the plunge into the world of big, flatscreen home television and ditch the small (by today’s standards) 28-inch cathode ray TV I’ve had these past few years. While 1080p high-definition models are everywhere and quite inexpensive compared with what you’d pay even five years ago, it’s already “old” technology. I’m going to get what’s known as 4K or UHD (ultra-high definition) TV, which promises much sharper resolution compared with the 1080p TVs.

The Sony PS4

The Sony PlayStation 4.

Not only that, I’m going to get a Sony.

The choice wasn’t easy. It came down to a Sony 55-inch or a Samsung 55-inch. Samsung, incidentally, is Sony’s rival in TVs these days, and they’ve been eating Sony’s bento for years now. They make a great product.

But I’m going Sony, but not because it’s a Japanese company, while Samsung is South Korean. No Japanese favoritism here. After doing the research, including consulting a tech-savvy pal (who happens to be of Korean ancestry and who also got himself the 65-inch version of the same Sony line), I think Sony offered the better product, especially in terms of color accuracy.

So, after all these years, while I’m also not about to buy Sony stock, maybe this purchase will, in a very small way, help keep a venerable company that I used to admire greatly on life support until it truly does, if possible, make a turnaround and again make products that inspire awe, not to mention loyal consumers, the way Apple does now. One can hope.

Until next time, keep your eyes and ears open.

George Toshio Johnston has written this column since 1992 and can be reached at [email protected] The opinions expressed in this column are solely those of the author and do not necessarily reflect policies of this newspaper or any organization or business. Copyright © 2014 by George T. Johnston. All rights reserved.

 

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