They use to be a household name in Australia, when it came to sound gear, now Sony is making a comeback with retailers such as JB Hi Fi and Harvey Norman reporting “excellent” demand for Sony soundbars, over-ear headphones, Wi-Fi speaker systems and boom boxes.
The Company that has struggled for several years across several markets now has a new spring in its step, due in part to a resurgence that began with a new philosophy three years ago.
Wallowing from poor management decisions, a blowout in operating costs the Company was forced to change their culture and go to market strategies.
In Australia the Company appointed Audio Active to sell their top end sound gear including headphones digital media players and top end 4K projectors, they have increased profits at the expense of revenue, they are also looking to get better brand traction after dumping their long time PR Company Hausman Communications.
Globally the company set out to reduce costs while improving the quality of their audio offering which at one stage was suffering as Sony engaged with low end manufactuers in China in an effort to reduce costs.
Mike Fasulo,President and COO of Sony Electronics in the USA told a recent analyst meeting that Sony is now heading in a new direction.
In Australia Sony Australia management is still refusing to talk about their busines which has undergone radical restructuring and cost cutting.
“We are changing our culture,” explained Mike Fasulo.
“Three years in, it’s now a trend – we’ve been culturally changing the organization. We’ve reduced costs but improved quality.”
“A major problem for Sony Australia is brand traction while the brand is well known by older Australians millenials have little or any knowlege of the brand as an audio Company” What they know Sony for is console gaming and even that is waning as gamers move back to PC gaming” said a Harvey Norman executive.
Their new found success was engineered back in 2013 when after years of losses and poor sales Sony embarked on a mission to re-concentrate on core businesses, a reset with a focus on the customer at retail and premium products.
Sony started by streamliningits TV and digital imaging divisions, concentrating on lower volume/higher margin premium products while cutting SKUs overall, especially in entry-level and under-performing segments.
“We needed to answer the consumer question, ‘Why Sony?’,” Fasulo explained. “We started with TV, which was bleeding the most, then cameras, which were doing well but it was time to be disruptive, and now we’re adding on audio.”
On the TV side, this new philosophy is starting to get traction with their new Z-series 4K UHD TV’s.
The problem Sony now face is that Samsung the #1 TV brand is now battling it out with Hisense for the top spot in Australia.
What Sony Australia is doing is targeting LG according to insiders. Next year Sony will have an OLED offering which they believe will give them the ammunition to take on LG’s premium strategy which is based around their OLED offering.
They also want to take a larger share of the 75-inch and larger markets.
On the camera side, the company combined its consumer and professional divisions, and is determined to make a run at Canon and Nikon for not only the enthusiast, but the prosumer and professional markets as well claims Fasulo.
The company recently started selling three new premium flagships: the compact RX100 Mark V, the mirrorless ICL APS-C a6500, and the a99II D-SLR. Both the new cameras and their premium predecessors have and will help to grow Sony’s share of the total ILC and full frame markets, Sony said.
“We can stay true to premium value and still win,” Fasulo said.
In the coming year, the company plans to tackle the audio sector with a similar premium/value philosophy. “I’m getting nervous saying this too often, but we’ve neglected a segment of the industry we can do well with,” Fasulo emphasized.
While Fasulo and Toshi Okuda, Sony’s consumer sales and marketing president, were hazy on exact CES audio product plans, soundbars, over-ear headphones, Wi-Fi speaker systems and AVRs were cited as potential growth areas in which Sony could capitalize.
“Audio has made progress,” Fasulo reported. “Not nearly to the extent that we’d like, and not as much as we’ve made on TVs and cameras, but there’s a lot of opportunity.”
Okuda cited the sales success of its Wi-Fi endowed and high-res audio-compatible HT-NT5 soundbar, and the recently released MDR-100x Bluetooth/active noise-canceling headphones – designed to take on and even surpass similar products from Bose and Plantronics to become the noise-canceling market leader – as examples of Sony’s new audio direction.
One premium audio area in particular Sony plans to expand upon is high-res audio, which the company hopes can become more mainstream.
For the first time at CES, Hi-Res Audio will have its own booth (14506 Central Hall), which Sony will share with the three major music labels (Sony, Universal and Warner), along with hardware partners including AstellaKern, Elae, Samsung, dCSm Audioquest, Onkyo, dts, MQA, and the Academy of Recording Arts & Sciences.
The company also is evolving its smart home strategy, potentially employing its Android TV-powered smart TVs as a hub, similar to the strategy being deployed by Samsung with its Tizen smart TV OS and SmartThings compatibility, and LG with its webOS TV system and its nascent SmartThinq ecosystem.
Okuda noted that the Android TV platform, with its connection to Google and Nest, is potentially more open and expansive than either of its Korean competitors’ solutions.