Sony Kills off Aibo, Qrio, Qualia

Tomo-chan writes "It seems Sony's cost-cutting has made it a more pragmatic company. The new boss has weilded his mighty chopper and put an end to both Aibo and Qrio, as well as some other marginal product lines. Aibo -- we'll miss you..."

Truly bad product timing or economic pressure?

[dada21]

I think the proper title should be "the consumer market killed off some of Sony's fad products." Sony wouldn't kill off products that made them a profit. A profit is the only proof of a product's viability -- if people are willing to pay you to perform a service or build a product, your ability to profit proves if the product/service is worthy of your time.

I think we'll see more of these fad/trend items from other Asian manufacturers start to fall out of the production lines. The U.S. is one of the biggest consumers of these useless products, and personal debt is way too high to keep buying more stuff that depreciates 60% the minute it hits the house. With Americans buying less, Asian manufacturers have to reorganize their product lines for items that we do need.

Sony is already out of my buying schedule -- the rootkit and the overall low quality of products they've made in recent years have led me to decide to never buy their products again. I help a few cEOs and upper management types from my client base purchase home electronics and appliances -- I'll always tell them never buy Sony. I remember a few years ago how many of these 6+ figure income types were asking about Aibo and other eccentric toys, nowadays I hear nothing of the sort. Even worse, I don't even hear the wealthy elites asking about the latest flat panel TVs, high end GPS systems or the latest computer gadgets. If the wealthy are having a hard time staying on the 18 month upgrade cycle, what does that say about the economy?

Sony is probably smart to start slicing and dicing. The best thing they can do is refocus on their higher end line -- people who can afford the expense will want the best quality product available. I hate seeing a company I loved become a company I hate. They chased the common man, and their products suffered for it. They chased markets created out of force against consumer action (music, movies, etc) to give their previous customers even more reason to hate them.

Sony, if you're listening and you want to be pragmatic (meaning practical), chop it all out. Sell it all off. Return to Japan, make high end products with meticulous attention to detail and care. Love your customers again -- those willing to pay for the product quality and service. Don't chase the Best Buy guy (or the Circuit City kitty?) -- let the upper echelon come to you.

Billions in annual sales at a 2% margin makes less sense than hundreds of millions at a 20% margin. Here's a hint for all you future entrepreneurs: the only thing that will keep you profitable is to keep your customers happy and offer them a consistency in your performance -- product quality and customer service. Ignore the trends, the fads and trying to sell everything to everyone.

Whatup?

[Stan Vassilev]

Well I'd say this was the wrong decision. Aibo and Qrio are in everyone's mouth. Everyone wants one, but they are just too darn expensive.

If they could keep developing it, several generations later they could rule the market for price efficient home robots. Still yet they were a great marketing tool.

I wonder what's their strategy, especially that RIGHT NOW, they need all the positive press they could get. Killing the world's favorite pet robots is a bad press coming after bad press.

Re:Truly bad product timing or economic pressure?

[silentbozo]

I think the problem is that Sony is dropping their R&D products in favor of going for what will soon be commodity items. Not a smart thing to do, but it's the "safe" thing to do. The problem is, competition in Korea and Taiwan ate that lunch a long time ago. The more Sony retreats from the markets it currently occupies (Clies, for example), the more consumer mindshare it's giving up. At that point, they're competing pretty much just on price, and I'm afraid that all it's going to do it kill Sony, ESPECIALLY if they're still being hamstrung by directives from their Media Entertainment division.

From Sony's Qrio site:

[macklin01]

From Sony's Qrio site [sony.net]:

Qrio embodies Sony's dreams and most advanced technologies in recognition, motion control, communications, IT and AI. [...] resulting technologies will be applied to a wide range of products and services, beyond robots, to enhance the fun and joy of life.

Well, so much for Sony killing off its own dreams. More seriously, how can Sony hope to offer innovative products in the future, if it fails to pursue cutting-edge research now. Certainly, developing high-precision manufacturing techniques, etc. can only help in the future when such technologies will be required. -- Paul

Re:Truly bad product timing or economic pressure?

[dada21]

Yes, I believe you are right. I also believe that the Internet is starting to bring free market ideals into action. I don't believe mega-corporations can exist for very long without government subsidies or favoritism. Now we have instant information, reviews, and feature and price comparisons. Sony can't compete on that level.

I believe Sony's (and most megacorps') best option would be to spin off into 5-10 separate companies. There is nothing wrong with these 10 companies (and maybe 20 other companies in other industries) getting together to fund R&D groups. In the long run, the "sell everything to everyone" idea will fall apart as you find companies that can specialize on specific markets. In the "old days" you had enough trouble selling one type of product to one market region. Now you can create new megamarkets that are very niche, but are international. The need to appeal to everyone all the time is quickly falling away.

Put down the pipe...

[Saeed al-Sahaf]

Mexican plants are perfictly able to produce high quality products; Sony is not paying them to do so. The problem has nothing at all to do with Mexican labor vs. some other location.

Re:Truly bad product timing or economic pressure?

[buraianto]

It's not just about profit, though that in itself is a complex thing. Aibo may not be profitable by itself, but it can very well improve the profits on other products. And, of course, if you are using it as R&D that may not profit you directly, but can certainly allow you to create products that are profitable.

Re:Truly bad product timing or economic pressure?

[__aajwxe560]

I agree with you that focusing on putting out a high end product "with meticulous attention to detail and care" will certainly be of high benefit to them, and I couldn't agree more that I would love to be able to trust knowing that when I buy a Sony product, I am getting that legendary Sony quality that seems to have gone noticably missing over the past several years.
The way the market forces work, I think this happens to a lot of companies. Lets continue with Sony - they create a great, well made, well thought out product. People come to find that these products from Sony are highly reliable, and last quite a long time. They also find they pay more money for the product. This is a reasonable tradeoff for quality for many people who can afford to make such a decision. Eventually, everyone owns said product, and so the consumer does not need to buy another one. Being as the company is highly successful and wants to continue to grow and prosper, they see the market starting to slow since everyone now owns there product. How can they possibly grow further? Start to produce lower end, more affordable lines of product and market them to the next segment down (Best Buy or Circuit City). More products sold which helps the bottom line and continues to demonstrate growth. Soon they find that you can add even more customers if you come out with a "Walmart line". The typical market segment that shops at Walmart are excited at the prospect of owning a quality Sony product for such a cheap competitive price compared to say, Daewoo or whatever offbrand they have.
I guess what I'm saying is companies often loose focus of what made them great in an effort to continue to grow and prosper. I can make the same argument for the way I am seeing Toyota start to go with some vehicles (obviously people would argue against me on this), and I'm sure there are numerous other examples.
Is the reasonable answer that a company should just focus on creating a quality, competitive product that is well thought out and stay with this philisophy? Certainly, but enormous forces are going against most companies to continue to grow the market and, in particular, raise the stock value. A publicly traded company must grow to attract investors. Stay private, and the company only needs to follow the philosphies of its owners.