Sony Admits Mistakes, Looks Forward
Sony admitted Monday that it had made missteps with its Walkman line of products, while also acknowledging that it was gambling by setting the price of the PlayStation 3 so high.
However, the company remains confident that it will be able to turn its Walkman business around despite losing considerable ground to the iPod and other competitors. Similarly, it expects the "value" of the PS3 to help sell the console.
Excluding its video games unit, Sony has struggled to stay relevant. However, since the appointment of CEO Howard Stringer last year, the company has begun to regain its footing, but not in the Walkman portable music player business.
Analysts have long said the Japanese electronics maker's players never took hold in the market due to its insistence on proprietary formats. Early on, Sony's players only played back ATRAC3 digital files, and used the company's MiniDisc format.
Neither format gained widespread acceptance, and by the time Sony had made the necessary changes, such as adding MP3 support and phasing out the MiniDisc line, it had already fallen far behind Apple by as much as a 7-to-1 margin.
Sony said in a press conference Monday that it had "miscalculated" the Walkman, but declined to elaborate. In an attempt to remedy this, Sony president Ryoji Chubachi said the company plans to release product that are similar, yet different to the iconic iPod, but wants them to remain "Sony-like."
The first inclination of Sony's future plans could be the Shuffle-like players the company has released in Japan. While similar in size, the unit has more capacity and is available in several colors, like the popular iPod Mini. Sony says the players have sold well, but has not released details on any possible release outside Japan.
What remains to be seen is whether the company's decision to price the PlayStation 3 well above its rivals may end up being a miscalculation as well. Pricing for the basic PS3 would be $499 in the US, some $100 higher than the premium version of the Xbox 360.
But Stringer feels the price is right, and says that gamers would pay for the console's potential. The PS3 is expected to be released in November, and Stringer said that if the console lives up to expectations, the cheaper price of the Xbox 360 nor the Nintendo Wii would play a factor in consumer's purchasing decisions.
The Xbox 360 will have about a year head start on Sony's new console. According to data from the NPD Group, Microsoft had sold over 1.7 million consoles in the United States as of the end of May, and was expecting to ship some 6 million consoles total worldwide by the end of this month.