6 months ago, Sony who has never made a profit selling their Bravia TVs, was telling us that the next big thing was set to be Internet TV in particular their Google TV offering. Six weeks ago they launched their new Bravia Google TV to much fanfare, now they are discounting their IP Google TV due to poor sales.6 months ago, Sony who has never made a profit, selling their Bravia TV’s, was telling us that the next big thing was set to be Internet TV in particular their Google TV offering. Six weeks ago they launched their new Bravia Google TV to much fanfare, now they are discounting their IP Google TV due to poor sales.
It’s also been revealed that the Company has moved to reduce the picture quality of their Bravia TV’s at the express instruction of the head of Sony’s TV operation who is trying to return the loss making Bravia TV operation to a profit.
The Japanese Company who in Australia have been forced to discount their once premium brand TV’s due to poor sales and a move to third party manufacturers in China and Taiwan, have not yet launched a Google TV offering, now there are serious questions as to whether they ever will.
Google TV aimed to bridge the span between subscription-based TV and Internet content, but a move by all the US TV networks to block Google getting access to their TV content is cau8sing problems.
Last week in the US Sony slashed the price of their Google TV offering which has only been on sale for four weeks.
Traditionally Sony employs a pricing strategy similar to Apple’s in that they price it right the first time and only discount when a new model is due.
Sony, who initially humped on the 3D bandwagon with little success, then jumped on the IP bandwagon in an effort to shore up falling TV sales.
At the weekend, during the biggest sales period in the US retail calendar, which includes Black Friday, Sony slashed the price of their Google TV Blu-ray Disc Player’s to $299 from $399.
US web site Tech Crunch said that the price cuts on Sony’s Google TV Blu-ray players and TVs indicate the service is in trouble.
The 46-inch, Google TV-enabled Sony TV is now $1,199, down $200. The 40-inch set is available for $898, a $100 discount.
Globally Sony is still trying to work out how to make a profit selling TV’s.
Long-time Sony employee Yoshihisa Ishida is the head of the Companies global TV operations. He claims that while he has ambitious plans to bolster Sony’s TV business by introducing a number of new products, he acknowledges that the current market is a difficult one.
Ishida was given the job last year. His first tasks saw him move most TV operations to third party manufacturers in an effort to build new fiscal discipline into Sony’s flagship business.
He admits that he was banking on IP TV and the launch of their Google TV offering to change the “perception of the TV.” This along with their 3D TV strategy appear to be failing according to analysts who now believe that Sony’s overall TV targets of 25 million units in this financial year will not be achieved.
In an interview with the Wall Street Journal Ishida said “The TV business right now is in a difficult situation,” if we can’t make that goal, it’ll be disappointing to me.”
Another problem confronting Sony is that the industry is awash in inventory as consumers slow their flat panel TV purchases.
Harvey Norman CEO Gerry Harvey claims that the TV vendors are suffering and that TV sales have slowed in Australia to the point that “no one is making money” he claims.
Sony is among Harvey Norman’s preferred TV brands. He admits that as sales stagnate or component prices rise due to the strength of the Australian dollar, razor-thin profit margins can disappear in an instant.
Ishida said of the Sony TV Business “When I was looking at the TV business from outside the group, I saw several areas that I thought I could easily fix. But I was only looking from the outside. There are a lot of internal issues.”
Earlier this year sold two television-assembly plants and has entered into an agreement to sell a third by the end of March 2011.
To speed up TV product development, Sony reduced the number of hardware and software platforms. Mr Ishida has even told engineers to focus less on picture quality, a once unthinkable command at Sony, because most customers can’t spot the difference.
According to several sources Sony was banking on their new Google TV to deliver sales, built from the ground up the TV that runs on an Android operating system and uses an Intel processor was seen as “something new” that competitors like Panasonic, Toshiba LG and Samsung did not have.
The Wall Street Journal claims that Jun Maruo, an engineer who was responsible for designing and developing the product, said Mr Ishida told him from the start that speed was the priority, a point that was reinforced by his near-instant responses to emails even on weekends and by his personal oversight of the project to remove layers of bureaucracy.
Four months before the TV was to go on sale, Mr Ishida told Mr Maruo that Sony was going to use Google’s operating system. At the time, Mr Maruo’s team was considering a number of possibilities for the software, including an in-house option.
“I was really surprised. Sony is filled with engineers who value the originality of their technology,” said Mr Maruo. “But he explained that this would be the fastest option and once he explained it, I agreed.”
From planning to launch, the new TV was completed in 13 months, about half the typical development cycle time for a new TV with new software and hardware platforms.
In Australia Sony is refusing to comment on their TV operations which have improved this year up against Samsung whose sales have gone flat after consumers failed to take to 3D TV’s.