1 / 20

Sony portable music players Technology and strategy SBS-EM 2010-2011

Sony portable music players Technology and strategy SBS-EM 2010-2011. Franquien Anaïs Jehin Maxime Xhauflair Gilles. Table of content. Introduction Evolution of Sony’s portable music players Walkman Discman Mini-disc player MP3 player Conclusion. Introduction.

adia
Download Presentation

Sony portable music players Technology and strategy SBS-EM 2010-2011

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Sony portable music playersTechnology and strategySBS-EM 2010-2011 Franquien Anaïs Jehin Maxime Xhauflair Gilles

  2. Table of content • Introduction • Evolution of Sony’s portable music players • Walkman • Discman • Mini-disc player • MP3 player • Conclusion

  3. Introduction

  4. Walkman (1) • Developed for internalpurpose • Launched in 1979 • Playback function, cheap components, headphones • Commercialization not obvious: • engineersdid not believe in the project • uncertainty of customerrequirement • right time to lauch the product?

  5. Walkman (2) • Launch: • Accelerating the marketacceptance • Managing expectations • Sign of youth • Initially, complementaryproductto the cassette tape • Became a dominant product • Incremental Innovation embedded in a technology push • Competenceenhancing

  6. Walkman (3) • Competition: Sanyo, Aiwa, JVC, Sharp • First moveradvantage: • Brand loyalty • Perceivedquality

  7. Discman • First CD produced in 1982 (in collaboration with Philips) • First CD portable music player worldwidelaunched in 1984  First mover • Discman  CD Walkman (strong brand image) • Complementaryproduct • More incremental innovation

  8. Mini-Disc (1) • 1980’s: working on improving the CD, theydeveloped the digital audio tape and the recordable cd • Philips: Digital Compact Cassette (DCC)  compatible with cassette players • 1992: Sony Mini-Disc • Not with compatible existingsystems • Use of complementaryassetsfrom Sony • 18 software and 32 hardware agreementsbefore the launch of the Mini-Disc • Audio quality a bit inferior to the CD

  9. Mini-disc (2) • Standard War: DCC hadsuperiorquality and compatibility • Consumers: wait and seewho the winner wouldbe • Philips: discontinued DCC in 1996 (old cassettes werecheaper) • 1999: competitionwith MP3 players slow growth for MD • 2000: format considered to be a failure by industryanalysts • Australiancompany (Xitel): card allowing the transfer of MP3 to MD saved the MD

  10. Mini-disc (3) • 2001: Sony exploited the MP3 opportunityand launched the NetMD and the Hi-MD • allowed the transfer of MP3 to MD in an easy and rapid way • Nowadays: Sony still produces MD players with Hi-MD formats allowing up to 45 CD’s to be uploaded onto one Hi-MD with an upload speed of one CD per 40 seconds

  11. Mini-disc (4) • Strategybased on Porter’s values: Sony wanted to create the new technology coming after the audio cassette, not to be an imitator of the next technology • Dominant design: use of well-established Walkman standard  shift concentration from design to cost quite rapidly • Appopriabilityregime: aggressive patenting policy to contain imitators • Complementary assets: used a lot of complementary assets it had in-house, which helped to reduce the lengths of the projects and the costs

  12. Mini-disc (5) • Creative destruction strategy:achieved growth through the cannibalisation of audio cassette • S-curve:knew better than any other company that the cassette had reached its limits since Sony invented it

  13. Mini-disc (6) Sony made a few mistakes: • It didn’t understand that the MD didn’t need to be prerecorded in the eyes of the consumer and that the industry saw it as an enemy of CD • It didn’t understand the growth of computer-based music in the early 1990’s with the rise of MP3 music. • Only a small portion of new technology leads to new product and only few new product are successful… Before arriving at maturity, the MD was already “old fashion” due to the arrival of the MP3…

  14. MP3 player (1) • 1996: Audio Highway released the first portable MP3 player which had a capacity of 32 Mbytes (6 songs) and was based on flash memory • 3 leaders: Apple (iPod), Microsoft (Zune), Sony (Walkman) • Market share in 2006: Sony 10% and Apple 75% • Goal of Sony: capture a market share of 20% with its Walkman. • Difficult task: make customers switch from iPod to Walkman  switchingcostsdue to the use of iTunes

  15. MP3 player (2) Porter 5 forces • Competitive rivalry within the industry • Numerous competitors, all electronics companies • Increasingly mature industry • Fixed costs not so high • Low exit barriers (some companies try and discontinue the MP3 activity) • Low differentiation but dominant design emerged with the Ipod

  16. MP3 player (3) Porter 5 forces • Threat of entry • Low barriers to entry • Strong retaliation possibilities of MP3 titans (Apple) • Access to supply and distribution channels quite easy • No legislation on MP3 manufacturing • Very low switching costs for the customers (except for iTunes)

  17. MP3 player (4) Porter 5 forces • Threat of substitutes • The price/performance ratio of the main players is quite high but doesn’t turn customers off • Extra-industry influences: mobile phones industry integrating MP3 players into mobiles but most players are both active in the MP3 player and mobile phones industries

  18. MP3 player (5) Porter 5 forces • Power of buyers • Unconcentrated buyers (media stores, electronics retailers) • Low switching costs but dominance of Apple in the market • No backward vertical integration • Power of suppliers • Concentrated suppliers (few CPU or hard disk manufacturers) • High switching costs because of high volume contracts with suppliers • Sandiskproducing hard disks becomes increasingly important on the MP3 player market

  19. Conclusion Although Sony created the market for portable music with the Walkman, it missed the shift to digital music-players. ”The youth-in-motion” brand has been overthrown by the more dynamic and cool iPod…

  20. Coming next… Does the FUTURE look bright for Sony?

More Related