Interview: Sony – Part 1

There aren’t many companies with as wide a reach as Sony. From its origins as a transistor radio maker in the 1950s, the company has grown to be active in most of the key technology sectors, and is leveraging this diversity to dive straight into new and emerging ones.

The company’s history in the UK predates the vast majority of tech firms by decades. Sony United Kingdom was founded in 1968, and six years later it became the first major Japanese firm to open a factory here. Sony UK now employs around 4,500 people, and has two factories in Bridgend and Pencoed.

The firm has outlived a number of market sectors it had a hand in developing, and it currently produces TVs, DVD players, cameras, camcorders, PCs, e-readers, stereo systems, mp3 players, games consoles, headphones, memory devices, car audio systems, movie licenses, record labels and more besides.

Being involved in so many markets has put Sony in a strong position to take advantage of the latest technological trends – convergence being one of the most popular buzzwords of the industry at the moment.

One example of this is 3D – what many see as the great white hope of consumer tech. As well as manufacturing PCs and TV screens capable of showing 3D pictures, the firm also has a hand in the media itself, through its Sony Pictures division. It also produces professional cameras that shoot broadcast-quality 3D footage, and a range of cameras and camcorders aimed at consumers.

Sony’s plan for the next year is to plough straight into new markets such as this, and it will be looking to create growth across its multiple divisions.

To get the full lowdown, we’ve spoken to three Sony execs…

PCR: The consumer side of Sony’s PC business has traditionally been much stronger than the B2B division. How are consumer tech sales going, now that spending has been reined in?

ANTHONY BROWN, CATEGORY HEAD FOR NETWORK COMMUNICATIONS, COVERING THE VAIO, READER AND WALKMAN BRANDS: What we’re doing to drive growth in sales, which is something we’re enjoying at the moment, is not any special recipe. Culturally in Sony right now there’s a big shift. We’re much more concerned with what consumers think of us than what we think about others – if we get that right, then market share will naturally follow. And so far that does seem to be happening – we are growing in a market that has been quite depressed.

Sony are almost in a unique when it comes to 3D, in that as well as the hardware it also owns a media arms that can be leveraged as part of a push, as well as the cameras. How much of a driver is 3D going to be in the consumer electronic market?

3D is a massive, massive deal for us. It’s a market that’s going to see huge explosions this year and in the coming years. Our ambition is to be the brand which is completely known for 3D – that goes for the Bravia television range right through to the Vaio line up as well. In terms of its relevance to computing, to begin with it will be relatively small in relation to the wider market.

If you think about consumers who would really benefit from 3D, you’ve obviously got games and those who use the PC very much for entertainment. I think it’s going to be relatively small in the first instance, but we can’t discount it as being niche going forwards.

The Vaio PC division is a hugely important part of your business – do you think the emerging tablet sector is going to harm the laptop market?

The tablet market is going to grow the category overall, but I also think some of those sales will be substitutional. If we look at the US, where there’s a little bit more history, though it obviously is still a very new market there, the netbooks sales were initially the category that seemed to get hit. And I have to say so far in the UK we haven’t seen that trend. The feedback I’ve been getting from within the channel is that actually the bigger impact will be on low-end notebooks.

Products like the iPad, which is obviously the one that’s very prominent right now, have taken a lot of the discretionary and impulsive spend out of the low-price notebook market. That seems to explain why the sector has been harder hit, which fortunately for us isn’t one that we operate within. That seems to have been hit hardest in terms of taking sales out of the marketplace.

What’s the biggest factor for consumers considering technology purchases at the moment?

If you’d have asked me that question 12 months ago I’d have said price. Now I would say its value. Now there is a very different type of consumer behaviour – it tends to mean that there is a more considered purchase process for the vast majority of consumers these days.

They’re thinking more about how long something is going to last them, rather than the impulsive purchasing behaviour that we have seen in the past. That’s a direct result of the recession. We’ve talked about the recession for a long time now, but now for the first time its actually starting to affect consumers.

We know from a lot of the research we’ve done that people’s disposable income for the first time is coming under a bit of pressure. It seems to me that the way people are reacting is not to buy the cheapest product in the PC market, but to see where they can get the best value.

To read part two of our Sony interview, where we talk to B2B boss Jonathan White, click here.