Sony Corp.’s once-dominant personal music player business is struggling against Apple Computer Inc.’s iPod despite the introduction of new models over the past year, Sony president Ryoji Chubachi said.
Sony’s Walkman digital music players failed to meet their initial target for the past year, Mr. Chubachi told reporters. He declined to describe a strategy to bounce back over rest of the year. “We miscalculated with the Walkman,” he said.
A recovery in the music-player business is important to put Sony back on a path to growth after years of disappointing results. Although Sony’s other central products — such as televisions and digital cameras — already are regaining strength, Mr. Chubachi said the Walkman was a critical product “to reinforce Sony’s resurrection.”
Personal music players are the smallest part of Sony’s electronics unit, but they have huge symbolic value because the company pioneered the market 27 years ago with its Walkman portable cassette players.
Apple seized the initiative in late 2001, when it released its first iPod music player. An attraction of the iPod is its accompanying iTunes software, which enables users to easily organize their music and access an online music store with more than three million songs. Apple’s devices have achieved an iconic status with millions of die-hard fans.
Sony has been fighting to regain its old status with digital music players of its own, but it faces an uphill battle. The company in 2004 established a service called Connect that was meant to compete with iTunes but that has failed to take off. Sony also released Walkman digital music players boasting long-lasting batteries. Still, in the first four months of 2006, Apple had a 77% share of the U.S. portable flash memory player market in terms of unit sales, according to market-research group NPD of Port Washington, New York. Sony had less than 10%.
This year’s winter holiday season will be a vital opportunity for Sony to gain market share. Mr. Chubachi said the company was planning products that were different from Apple’s lineup — but declined to give further details. “We want to come out with products that are Sony-like,” he said. “Some parts may be similar [to the iPod], where that makes sense. But we want them to be products that are uniquely Sony.”
Sony’s latest digital music players, launched in Japan in early June, indicate the company may try to compete on look and battery life. The devices are small, for consumers who don’t want to carry their entire CD collections around. Like Apple’s “Shuffle” model of iPod, they can be plugged directly into computers and store a roughly equal amount of music. They are similar in size and weight. Sony offers a version in the same size as the iPod Shuffle with more memory, and the players come in a greater variety of colors and a fashionable, distinctly Sony-like design. They also boast a long-lasting battery that can support as much as three hours of play after just a three-minute charge.
Mr. Chubachi said initial sales in Japan had been better than expected. Sony plans to launch them outside of Japan but has given no details.
Part of Sony’s strategy to turn the Walkman business around depends on its ability to integrate software and hardware — something at which Apple has excelled. Sony Chairman and Chief Executive Howard Stringer, addressing the same group of reporters, said he wanted the whole company to focus on this task. “We need to marry software engineers to product designers at the beginning of the creation of new products,” he said.
(via Wall Street Journal)
