I can across this piece in the NY Times technology section. Essentially it posits that Sony is rooted and by extension so is Japan in terms of its leadership in consumer technology.
Some call outs that caught my eye –
In fact, it is in a fight for its life — a development that exemplifies the stunning decline of Japan’s industrialized economy. Once upon a time, Japan Inc., not to mention Sony itself, seemed invulnerable.
The verdict of the stock market has been swift and brutal. Sony’s share price closed at 1,444 yen ($17.83) on Friday, a quarter of its value a decade ago and roughly where it stood in the mid-1980s, when the Walkman ruled. Sony’s market value is now one-ninth that of Samsung Electronics, and just one-thirtieth of Apple’s. (Holy crap)
Sony’s gravest mistake was that it failed to ride some of the biggest waves of technological innovation in recent decades: digitalization, a shift toward software and the importance of the Internet.
This failure of incumbents to ride new waves is a feature of Tim Harfords book Adapt. I cannot help thinking of parallels with Kodak which invented the digital camera yet didn’t see the impact it would have on its business.
With its catalog of music and foundation in electronics, Sony had the tools to create a version of the iPod long before Apple introduced it in 2001. The Sony co-founder, Akio Morita, envisioned as early as the 1980s marrying digital technology with media content for a completely new user experience.
Hands up if you owned a Walkman which was then supplanted by an iPod
Sony’s woes hurt not just Sony, but also Japan. In the United States, new technologies are often developed by young companies not held back by their past. These upstarts eventually replace slow-to-adapt giants. But in Japan, no major electronics manufacturer has joined the industry’s top ranks for over a half-century. And, though struggling, companies like Sony continue to lure some of the country’s top talent.
The issue of this being a wider problem is interesting as is in some ways reflected in the Nikkei which has been in a bear market for effectively 23 years.