you are watching cold fusion tv
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hi welcome to another cold fusion video
previously in the last episode of the
story of sony we saw how they went from
a failing company making rice cookers
and electric blankets
to an innovative group of engineers who
influenced american society
with their breakthrough portable radio
today we'll continue the story from 1960
with a timeline of sony's global rise
let's begin in 1960
sony would expand into the united states
with the formation of sony corporation
america
shortly after this using the transistor
technology that they had perfected five
years earlier
sony would create the first transistor
television for context
tvs of the time were still huge because
they were using massive bulky vacuum
tubes to power them
so sony's model was a revolution much
smaller than anything that had ever come
before
in 1968 sony would release their
triniton tvs
it had twice the brightness of regular
tvs for the day and was the greatest tv
product series of the entire century
these trinitan televisions were known
for their great quality
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oh
the triniton tv system was so good that
it supported sony's growth for the 30
years after its launch in 1968.
before this all japanese products were
seen as cheap and of low quality
sony's color tvs changed the perception
of japanese products
1975 saw the release of sony's beta max
home video tape format
and camcorder the betamax tape system
was far superior to jvc's vhs release
later that year
but it ultimately failed as it had less
tape running time and was more expensive
in 1978 a sony executive would take a
trip to europe to see a spin-off
technology of the philips laserdisc that
could play audio
philips and sony already had a healthy
relationship since the late 60s and
decided to pair up
phillips was a world leader in optical
video discs and sony had considerable
expertise in digital audio signal
processing technology
when the two companies joined forces
they would create the digital audio disk
now known as the compact disc it would
be released in 1982
in july of 1979 sonia releases the first
stereo cassette player
called the walkerman he is considered
one of the most iconic music players and
has sold
over 400 million units of course there
were portable music players before the
walkman but sony's was the first that
was easy to use
and convenient
you really feel the music the sony
walkman
is a tiny stereo cassette player with
truly
incredible sound
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put on a walkman and see the world in a
whole new light
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the sony walkman ushered in the
company's golden age
it created a brand new culture of
listening to your own personal music
outside
in late 1982 the first cd player was
introduced to the world by sony
and just two years later in 1984 they
would create a portable version
it was called the disman sony were on
fire by this stage and according to
cultural critic
stephen bailey in this period sony was
the apple of its day
and much more by the end of 1988 sony
had acquired cbs records for two billion
dollars and renamed it sony music
entertainment
and also columbia pictures entertainment
1993 would be a year that would change
the gaming landscape forever
in november of this year sony computer
entertainment was established
and one year later the sony playstation
was released
it was the first video game console to
ship more than 100 million units
the year 2000 kicked off with the
release of the sony playstation 2.
it went on to become the best selling
home console of all time the next year
sony would establish its own bank
and sony ericsson mobile now known as
sony mobile
2004 saw the release of the psp to
compete with the nintendo ds
and the playstation 3 would come two
years later in 2007
sony would innovate yet another world
first product the first
oled tv 2011 would see the playstation
veto and one of the first
4k tvs two years later the playstation 4
would be released
and in 2016 the playstation vr headset
was launched
according to one patent consulting firm
sony has 366 patents for virtual reality
all these achievements over the lifetime
of the company are nothing
short of remarkable but as some
spectators are noticing
sony has been stagnating a little the
company's sales haven't been what they
used to
and the clarity of their direction is a
little muddy let's take a look at some
reasons of why this is happening
just quickly before we get to the
company itself we should take a look at
the background environment sony was
facing
when they started to falter in 1990
there was a devastating economic
recession in japan
it was caused by a shift in the nation's
demographics and faulty central banking
policies
the central bank of japan loaned too
much money pushing up asset prices
until it all finally burst in 1990
this resulted in rampant stagflation in
the country
wages fell prices stayed stagnant and
businesses struggled
it was so bad that there's a name for it
it's called
the lost score or the lost 20 years
because of this recession sony had to
replace full-time staff with part-time
staff
and job security became scarce during
this time of uncertainty
and low staff morale sony had to start
fighting off strong industry
competition from a rising south korea
taiwan
and china so the question must be asked
why did these countries suddenly rise
well
in the 1990s and 2000s the global
electronics industry experienced a
structural change
after the pc and internet revolution the
industry began to standardize parts and
outsource production and assembly work
to companies in low-cost emerging
economies
this was cheaper and more efficient on a
macro scale
meanwhile most of sony products were
still being made in japan
which had a higher cost in the
manufacturing pipeline than its
competitors
all of a sudden japanese products were
expensive compared to the emerging
manufacturers
when questioned on why he didn't want to
drop prices sony chairman
akio morita said we are selling diamonds
at the time this was true as sony
products were of high quality in the
early 90s
but eventually the other manufacturers
got better at their craft and the
quality of their products improved
suddenly there wasn't all that much
distinction to justify sony's high price
the next issue for sony began in the
year 2001
this is when hardware manufacturing
began to make room for the endless
applications of software
it began with the ipod a device that
uniquely got music enthusiasts
tied into software like never before
amazing little device holds a thousand
songs
that goes right in my pocket do you
remember what it was like when you got
your first walkman
you remember that feeling when you got
the first walkman in your hand it was
like
wow well i haven't picked up any mp3
player
that has made me go wow okay i want to
carry this wherever i go
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this is the first thing that makes me
feel wow
okay but this particular trend really
accelerated from the year 2007 with the
iphone
with this apple achieved a breakthrough
innovation in handsets
it allowed users to expand the
functionality of their phones
through applications developed by
engineers and even individuals worldwide
so how did sony respond
nobuyuki ide president of sony during
the early 2000s
reacted by trying to combine sony's
audio and video technology departments
with its i.t department
ideas stated that he just couldn't do it
the company was simply too big
although he was aware that there was a
need to shift sony's business strategy
he could not change the mindset of all
140 000 employees and managers
the top leader is not a person with
supernatural powers he said
during this time idea even considered
acquiring apple
in an effort to save themselves sony has
recently streamlined its operations
focusing less on audio and visual
manufacturing
unfortunately according to one executive
who spoke with the times of japan
quote now that many excellent workers
have left sony as a result of structural
reforms
the company's power of innovation has
declined sharply
end quote in the sphere of manufacturing
sony has been outmaneuvered by the
koreans chinese
and taiwanese in fact in the early 2010s
most of sony's profits actually came
from their financial services
and not their manufacturing operations
in 2013
it was so bad that some investors
suggested that sony should just abandon
their hardware division and just stick
to making financial loans
even the entertainment area of the
company has taken a hit it's fallen into
a two-way tire with paramount as warner
brothers surges past
in addition to this the xperia phone
brand has had disappointing sales
and a backlog of sourcing issues and
this isn't to mention that sony is
getting steamrolled in the tv department
by samsung
in short today sony is losing ground
everywhere it's simply too large too
diverse in its categories
and focus too much on the sub-brand
names
with all of that being said it's not all
bad though
in late 2016 sony started to turn around
their smartphone department was losing
money all throughout 2015
but did manage to post a reasonable
profit in 2016.
they did this by streamlining the phone
product range cutting costs
and focusing harder on premium phones
with profitable margins
while identifying better target markets
with this being said
this doesn't mean that sony's phones are
doing well versus the rest of the market
samsung apple and the chinese brands
still largely dominate
the brightest spot for sony is the
playstation 4. it's doing
very well selling over 17 million units
in fiscal year 2016.
the strength of the ps4 has helped sony
reach its full first year of profit
in three years the playstation 4 was so
good that it amounted to 78
of all profits in q1 of 2016.
some other bright spots is sony's
digital camera division and also their
smartphone sensor division
sony's smartphone camera sensors are
used in other popular brands like apple
samsung lg motorola oneplus one
and of course the sony xperia range
there's also talk of a new sony
smartphone camera that can shoot
full hd at get this 1000 frames per
second
so now that we've seen how and why
sony's began to falter
what are some solutions some analysts
say
that sony needs to break from its past
by completely transferring its existing
businesses to overseas or even separate
companies
in a bid to create innovation
since the playstation is so successful
perhaps they should double down on that
and focus on that segment
things like partnering with content
creators to make even more killer games
for the ps4 line
as well as some intuitive and addictive
vr titles could really provide some
growth
doubling down on differentiation with
their smart friend camera line does also
have some potential
all in all as was seen time and time
again on cold fusion
this is a common problem for companies
their rise is meteoric
but when they become too large and
diverse management becomes more
fragmented and often bureaucratic
and it becomes difficult to see where
the next clear step is
usually when this happens increasing
competition creeps up from behind to
steal some thunder
in conclusion the future of sony is
hanging in the balance right now
they've arguably been stagnating for
over a decade but in the last year the
company has been starting to show some
promising glimpses of hope
ultimately we have to wait and see how
they react to their environment moving
forward
that being said if there's anything that
we've learned from sony in the last 60
years from the previous video
is that they've got a very innovative
dna so a renaissance is a possibility
anyways that's what we'll leave the
story of sony today hope you enjoyed
that
i found it quite an interesting history
to go through and kind of analyze where
they've been starting to falter
if you're new here don't forget to
subscribe to this channel and i also
want to thank all of you for helping me
pass a million subscribers i should have
a little thank you video coming out soon
oh yeah if you want to see the previous
video of the origins of sony which is a
fascinating story i think you really
should watch that if you haven't already
i'll leave it in the link below and also
an end card at the end of this video
but yeah anyway this has been degogo
you've been watching cold fusion
and of course i'll see you again soon
for the next video cheers guys have a
good one
cold fusion it's me thinking
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you