Don't Blame Sony's Exit from PCs on Industry Trends

By Doug Mohney February 11, 2014

After Sony announced it was selling off its computer line, analysts and the media were trying to spin the action as having been caused by the general decline in PC sales and the uptick in smartphones and tablets.   While the decline of PCs can be seen as a contributing factor, the majority of blame lies with Sony culture and management.

Manufacturers of PCs have been on cruise control for years.  Dell and HP both got a rude wakeup call when tablets exploded onto the scene, leaving them and others scrambling to figure out what the future should look like when it comes to desktop and laptop devices. 

Sony, in comparison, provided innovative design during those years. Its laptops were lighter and usually much better looking than anything that ever came from the rest of the pack. Its desktop PCs weren't really much to talk about until the company got into the all-in-one business.

I'd argue the Sony VAIO Tap 21 portable 21 inch touch-screen "desktop" – which I describe as a really big Windows tablet – is actually the future of traditional desktop designs, to be combined with a really good local area storage hub.   For real work, people need bigger viewing real estate along with a keyboard and mouse – the VAIO Tap 21 provides both.

Sony's two biggest problems in the PC hardware arena were failing to fully leverage a worldwide brand the way Apple and Samsung have and a failure to act aggressively enough to gain market share.  VAIO products always incorporated the best components, but also had higher pricing that failed to attract the sorts of sales that Dell, HP and Lenovo have managed to achieve.

Perhaps more mind-boggling, Sony has struggled for years to find the next big thing despite leading in PC design and TVs.  The company reported that it expects to lose $1.1 billion in its current fiscal year last week, and would cut 5,000 jobs in addition to selling the VAIO PC unit and spinning off its TV manufacturing business into a wholly owned subsidiary.

Corporate management of Sony has conducted four rounds of large scale job cuts over the last decade.  For it to sell off PCs and move towards getting rid of its TVs gives me a flashback to Kodak's death spiral.  Unlike Kodak, Sony continued to show leadership and deliver quality products.

Sony believes it can remain a player in consumer electronics, keeping game consoles – Microsoft, take note here – and building upon increasing success with smartphones.  

Meanwhile, the future of VAIO is now with Japanese Industrial Partners.  The private equity firm plans to leverage Sony's "wealth of innovative design experience and operational  know-how" to achieve future growth and profitability.  It will be interesting to see if Japanese Industrial Partners can bring commercial success to VAIO.  Meanwhile, I'm going to see if I can pick up a Sony laptop or all-in-one at firesale prices.

Edited by Blaise McNamee

Contributing Editor

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