Both are bad news for employees of the companies and for fans of the brands, but hopefully no one is reading any larger trends into the closings. Both failures are entirely the fault of the respective companies’ management and not indicative of any particular plague endemic to just Canada or even retail as a whole.
Sony’s failure is especially epic, given how much time and opportunity the Japanese company has had to avoid it.
Just over two years ago, I wrote about how the stalwart Asian technology companies—Sony, Samsung, LG, Sharp, Toshiba and Panasonic—were in trouble because of an acceleration in the commoditization of hardware.
With the explosion of the internet and broadband speeds, software and services have become all-important. The doohickeys on which these run, which the Asian manufacturers have mastered over the past few decades, are increasingly disposable and interchangeable, and therefore less valuable.
Here’s the proof. Check out the stock performance over the past five years of three of the largest software- and services-oriented American companies—Apple, Google and Microsoft:
All of those lines have trended upward. The Asian hardware makers’ performance tells a very different story:
Only one of the major Asian tech companies has managed to buck the down, down, down trend, and that’s Samsung:
The South Korean company’s success can be largely explained by the company somehow winning the Android sweepstakes, where Galaxy devices became the consumer’s de facto alternative to Apple’s iPhone.
But that ride is ending now too as smartphones become commoditized. Samsung’s profit plunged 60 per cent in its latest quarter because of slowing phone sales. It’s a safe bet that before long, the company will be joining the downward cohort.
Sony’s membership in this group is especially surprising given that the company has something none of the other Asian manufacturers do: an almost embarrassing wealth of content.
When Sony isn’t being hacked, its studios around the world are pumping out movies, television shows, music and video games.
How the company has failed to parlay that into success that at least equals its American peers—even Microsoft—is one of the biggest business head-scratchers in recent memory.