Japan branding futures - the Sony story

IT WAS interesting to compare Tokyo and Taipei within the space of just a week. The two cities are just three hours away by plane, but couldn't be more different - most of Taipei, excluding Xinyi where Taipei One-on-One and TWTC are, looks like those 70s Godzilla Japantown movie sets where dirty Lego-like cubes with unwashed facades represent buildings.

Tokyo is way bigger, way cleaner too, and somehow more futuristic, including those impossible rainbows of colours flashing on the neon signs of major brands there.

Brands? That's an interesting comparison too - while Taipei's PC component giants have only recently started their global branding expansion, Japan was there for decades. Sony, Toshiba, Panasonic, NEC, Fujitsu - and do you still remember TDK cassettes or Akai and Aiwa Hi-Fi sets?

But, the brand strength doesn't seem to blossom that much anymore in the land of cherry blossoms. Even places like Akihabara have an increasing non-Japan vendor presence in every product segment, for the first time matching the Japanese ones in some cases.

Sony, the uberbrand of Japan, is a good example. Things like transistor radios followed by top notch HiFi lines, Trinitron TV sets and Walkmans were the lifestyle landmarks of the generations from 60s to early 90s. We all know what happened to it in the past few years, with LCD and Plasma TVs from other vendors pushing Sony aside in the television market, MP3 players obsoleting the Walkman, and all the recent Playstation delays.

It seemed as if there was no die-hard competitive push in there anymore. What happened? At a price of a cheap Western dinner (I still don't know what attracts the Japanese to TGI Fridays next to much nicer local outlets), a talkative Sony exec shared some thoughts with me near their Tokyo office.

The exec's observation for a main reason was that, like several other large Japanese companies, Sony lost the 'fighting spirit': two decades ago, the employees, engineers included, loved their brand, eat and breathed their brand, and competed irrespective of personal sacrifices to stay on top of the heap in technology, performance, design and sales - globally.

In the past fiften or so years, the exec says, the new breed of youngsters came in with a different focus: make the quickest possible buck riding on the company's brand for an improved CV, and then job-hop to the next target, repeating the play.

As a result, no one really focuses on the best products, specs or even meeting the timelines, especially since the Japanese equality-oriented system has little reward for the overachievers. The exec even mentioned several known cases where the products were rushed out without completely implementing or validating some critical features at start.

Then, things that would have been considered an outright insult to the company 20 years ago - like key components sourced from China and Korea - are now commonplace. And, according to the exec, no one inside seems to care much.

The result? Samsung beat Sony in TV and video branding, and Lenovo did the same for notebooks. As for portable media, even Creative Zen has seemingly better recognition than Sony's successors to the one and only Walkman.

On the other hand, not many in the Tokyo office were happy in the past when Sony started spending top bucks on the Hollywood movie buzz followed by all the DRMed music mess. The feeling among some of the old guard, the source says, was that the core focus of Sony - the best consumer electronics there is - was lost. Well, I guess, that feeling was right at least.

Another observation by the exec was that Japan made a cardinal mistake by not pursuing its own CPU architecture and instruction set, even if it meant taking over a "gaijin" (Western foreigner) one like MIPS (NEC) or Alpha (Mitsubishi) and developing it independently across all market segments.

Only Fujitsu enjoys continued success with its own SPARC64 line there, but it is limited to the large server market niche. The exec's point was that Playstations and Nintendos should use Japan-made, Japan-designed CPUs with all product control there, rather than let an external party potentially hold them hostage. There was a group within Sony which lobbied for this approach since the start of the Playstation effort, according to our source.

Talking about Playstation, the exec thinks it was overall a global winner opportunity missed, partly due to the misunderstanding by certain parts of management what this market really is and how to address it, as well as underestimating the Microsoft danger. The feel of "it was our market to lose" was there.

The person I talked to is not confident of the next-gen Playstation being delivered on time either, even though this time the 'senior management' is supposedly more pushy - the feel is that new truly driven project leader team is needed. The problem? Too many managerial staff seem to be contented with the present situation where their sales mostly ride on the past glory of Sony.

Finally, while the innovation seems to be more patchy these days among some of the brands here, the exec made a point that there are thousands of technology breakthroughs - many related to consumer electronics too - in Japan's superb R &D centres and academia, and quite a few very applicable right from the start. But, still, very few ever get considered for a business spin or even properly considered by the big fish.

It's still not too late for the likes of Sony - or, for that matter, other Japanese biggies - to come back and force a reconquista of the global consumer electronics and computer markets, or at least a bit extra market share gain. A combination of new "killer product", consistent technology and design lead, and a bit of refreshed, more aggressive marketing and PR on the worldwide level, could be just the right cure.

As for the exec, the source is right now looking for a hop to another job next year - purely for the monetary gain, supposedly... that's Japan, too. µ