Will Samsung become the next Sony?

Recently, there is news that Sony Mobile will significantly reduce its loss-making Sony mobile phone business in China and stop developing specific mobile phone models for the Chinese market. In fact, Sony has been losing money for almost seven consecutive years since fiscal 2008, and the loss continued to expand in fiscal 2014. Sony raised its expected loss for this year from 50 billion yen to 230 billion yen. In addition, we know that Samsung has also declined for three consecutive quarters this year, and the common point is that the decline of Samsung and Sony is dragged down by the mobile business.

Sony was the third largest smartphone manufacturer after Apple and Samsung in 2012. With the sharp increase in global smartphone sales, Sony's smartphone market share has been surpassed by Xiaomi, China Coolpad, and Sony has been marginalized and faded out in the domestic terminal market. Samsung has been eroded by China Coolpad in the low-end and mid-end markets this year, and the trend of being suppressed by Apple in the high-end market is becoming more and more obvious. The trend of decline seems to be becoming more and more obvious. So the question is, will Samsung become the next Sony?

Too many product lines drag down the brand, and hardware innovation becomes useless

In fact, Samsung and Sony are similar to some extent, such as advocating technology and being good at hardware technology. However, as smartphones have developed to the top, some of their hardware innovations have begun to fail to keep up with user needs and have gradually become "useless". For example, Samsung's eye control function and Note Edge curved screen mobile phone. Samsung's curved screen has not yet gained a good reputation among the user group. Samsung's main advantage over domestic manufacturers is that its supply chain advantage is too huge compared to domestic manufacturers.

Looking at Sony, Sony's rugged phones seem to show people that Japanese companies have a habit of advocating product durability, but in today's mobile Internet market, excessive technology has become a strategic shortcoming. Sony, like most Japanese companies, is a microcosm of the entire industrial era. It is obsessed with the perfect details of hardware and is overconfident in its own technology and aesthetic judgment, but it does not have close contact with users. When the products are launched on the market, users often do not buy them.

Sony's product line layout is quite extensive. It is reported that Sony has more than 1,000 products, including game equipment, televisions, cameras, computers, music players, e-books and toys, movie studios and music brands, etc. The products are numerous and the battle line is too long, but the problem is that Sony's product line is constantly extending, but few products have the core competitiveness to drive the brand up. Sony has penetrated into too many fields such as consumer electronics and even music and movies. Regardless of whether the products are good or bad, the high, medium and low-end products in various fields are unified with Sony's brand logo, which has weakened Sony's brand image. Sony also lacks a center point, that is, core products, in all its product layouts. Therefore, Sony also lacks core competitiveness in its core business areas. Samsung's empire product line is also extensive. Samsung is involved in many industries such as smart phones, home appliances, insurance, construction, aviation, and military, almost involving every aspect of the Korean economy. But Samsung's advantage over Sony is that it has established a brand in the field of mobile phone terminals and has become the only mobile phone manufacturer competing with Apple in the high-end market.

Although Samsung mobile phones are the flagship products supporting the Samsung brand at present, Samsung's problem is that its battle lines are too long. In the terminal field, it has a wide range of high, medium and low-end products. An important reason for the decline of Samsung's brand value is that it has not made a high-cost-performance quality in the low-end market, which has caused certain damage to Samsung's terminal brand. Samsung's widely deployed product lines and low-end mobile phone products with different temperaments and reputations are lowering its brand height. It can be seen that the common problem of the two manufacturers is that they are too involved in consumer electronics product lines, causing the brand to weaken and gradually become blurred, which is dragging down its brand premium in the high-end market. This is an important reason why Samsung may follow in Sony's footsteps in the future.

Let's look back at Apple. Apple only makes a small number of products, but all of them maintain a high degree of consistency in temperament and level. That is, whether it is iPad, iPhone, iMac, or iPod, from the design point of view, they maintain the unity and fit of visual temperament with the Apple brand, and all products maintain high-end and high prices in this field, which is the source of the premium of high-end brands.

Technology genes rather than Internet genes Products cannot control user pain points

In the era of mobile Internet, Apple's "software and hardware integrated closed system" ecological chain construction is unique in the world. In fact, in the field of mobile terminals, the software ecological layout is the common shortcoming of Samsung and Sony. We know that both Samsung and Sony have strong hardware manufacturing genes. Samsung has the advantage of horizontally integrated supply chain, while Sony is famous for its technology. Hardware manufacturing technology was once Sony's proud advantage, but after Samsung and Sony developed to the top of hardware, this advantage was gradually stripped away.

We can see that after Sony repurchased Sony Ericsson, it still has certain advantages in camera performance, video playback and other technical aspects, but this slight difference in hardware performance is no longer an important factor in determining whether users buy a smartphone. Users pay more attention to the fashionable appearance, software ecology and operating system fluency. Under the influence of Moore's Law, Samsung has gradually exerted its strength in the high-end market, and it is an indisputable fact that the brand premium has shrunk. In addition, Sony has almost no achievements in mobile software content, while Samsung has exerted its strength in software but has no achievements. For example, Samsung's bada system is lifeless, and Samsung's Touchwiz interface is widely criticized. Samsung's entertainment store "Samsung Hub" and many applications including S Voice, S Health, Chat On, Group Play, etc. have received mediocre responses.

Sony is called a fallen aristocrat because of its craftsmanship and technical capabilities in the industrial age. For example, in the mobile phone camera market, most of the cameras for Android flagship phones are supplied by Sony. However, Sony still lacks the ability to match cutting-edge technology to user needs. Even the Xperia Z series, which Sony is proud of, has no obvious advantages in terms of performance and cost performance compared with Samsung or even the domestic China Cool Alliance. In the Internet era, Internet software has an anti-subversive power against hardware and dominates the upstream of the industrial chain. This is an era where users are king and product experience and demand drive hardware technology innovation. The software ecosystem layout with the iOS operating system as the core is also Apple's absolute advantage over all other Android manufacturers, and it meets the needs of users in the mobile Internet era for operating systems and software content experience, while Sony mobile phones are gradually out of touch with user needs.

Sony has acclaimed technology, but its technology does not match user needs. Sony's products are all over the world, and it can be said that it has a large number of users, but Sony does not know where the users are and what their needs are. This is a lack of Internet thinking. In fact, this is also reflected in Samsung, that is, some of the current hardware innovations of Samsung and Sony cannot find the pain points of users. As mentioned earlier, we have seen that the launch of Samsung's curved screen mobile phone and Sony's three-proof mobile phone are not accepted by users. This is actually the same as Nokia's mobile phone that can crack walnuts, that is, the needs and pain points of users using mobile phones are not here. Samsung and Sony have been immersed in the hardware industry era for too long. In addition to lacking software genes, their product performance has also begun to lack a kind of control over user needs in the Internet era.

The hardware is too heavy and lacks the soft power to support the brand premium in the high-end market

In fact, Sony has continuously launched new flagship models priced around RMB 4,000 from 2012 to 2014. It is reported that it has launched six new flagship models, including z, z1, z2, and z3, in two years. Then it has continuously raised expectations, and then lowered prices after losses. It seems that Sony has not found the way to sell high-end smartphones. Of course, this is not a reason for other brands in the Android camp to laugh at Sony. Because we also see that once Samsung and domestic manufacturers launch new flagship models, the prices of old flagships will plummet, which is a taboo for high-end products. From another perspective, high-end mobile phones in the Android camp basically cannot find a support point for brand premium. We see that even after the release of iPhone 6, the price of iPhone 5S has not dropped too much. In the final analysis, Apple has dominated the entire industry chain of the iOS camp with its excellent closed system built with iOS as the core, and supported the premium of its high-end brands, which has a certain value preservation. Maintaining the stability of high-end prices is Apple's market strategy to drive its own brand influence closer to luxury goods in mobile phones.

On the other hand, we often mention that Samsung is facing the impact of Apple's large screen and the erosion of domestic mobile phones in the mid- and low-end markets. In fact, Sony encountered this problem earlier. In the era of smart phones, HTC and Samsung have had their glorious moments in the Android camp. Sony Ericsson also relied on the advantages of Walkman and audio and video to have a brief glory in the terminal field, but then it was forgotten. The reason is that in addition to Sony's weak channels and marketing, its consumer hardware business, which it relied on to start, was impacted by Samsung, HTC, and Chinese manufacturers. The rise of Korean and Chinese manufacturing has made the road of Japanese manufacturing narrower and narrower. Samsung relies on its fashionable appearance design and vertically integrated hardware advantages to make this point come a little later. Today, Samsung, which no longer has hardware advantages, has begun to encounter strong erosion by Chinese manufacturers.

We know that Apple has built a closed system with iOS as the core, and continuously provides users with high-quality services and content through iTunes and Apple Store. This year, Apple launched three major platforms: HealthKit (health), HomeKit (smart home), and CloudKit (cloud). It can be seen that Apple's focus in the future will shift to software and content services.

This is one of the major problems faced by both Samsung and Sony, that is, it is difficult for a company that started out as a hardware manufacturer to quickly adjust itself to become a software-oriented hardware company. This is also an aspect of genetic determination. We have seen that the upstream of the industry chain has always been giants with software genes or a combination of software and hardware (Apple), such as Apple, Microsoft, Google, Amazon, and Facebook. Manufacturers with pure hardware genes often eventually decline at the top of a certain hardware industry development, and then either sell products in that field to shrink product lines (for example, Sony sold its PC business and divested its TV business), or enter a new hardware field to continue to expand new product lines. At present, Sony is gradually fading out of the Chinese market, and the problems encountered by Samsung are essentially the same as those of Sony. Both are capped by Apple above and strong challenges from Chinese manufacturers below. It’s just that Samsung’s current advantage in the horizontally integrated industry chain in hardware is still there, and the space for reducing costs to obtain profits is still there, while Sony has withdrawn from the stage earlier due to conflicts of interest within the system and mistakes in its global strategy.

The impact of industrial thinking, marketing strategies, and the industry environment

In the long-term development, Samsung has also formed a corporate management system with clear responsibilities and powers, clear levels, and a seamless structure, which has created an industrial-era mindset that is very different from today's open Internet management system. This architecture system has some inhibitory effects on stimulating innovation. The conservative and impeccable mentality has become Samsung's best choice to offset risks, so we can see that Samsung's overall impression on the outside world is that it has always adopted a follow-up strategy and lacks a radical innovation mentality.

In the terminal, Samsung and Sony also have something in common in that they are both traditional hardware manufacturers, that is, they still please consumers through hardware configuration. Samsung has basically no trace of marketing on social media platforms, and media investment such as television media is still its main marketing strategy. This is also fully reflected in Sony. In the social media era, Sony is almost nowhere to be found. On the other hand, the marketing tastes and needs of Chinese users have changed, and social media marketing has become the main battlefield. Mobile terminal brands rely on Internet channels to penetrate the vast majority of users. This is an important reason why Xiaomi is popular and Sony is gradually fading.

Of course, Sony's decline has deeper factors, such as the industrial transfer of manufacturing technology, which is related to the overall background of Japan's electronics industry. However, this hidden danger brought by the genes of the electronics manufacturing industry may also befall Samsung. Although Samsung has made adjustments to its market strategy in the terminal market, such as the recent release of two mid-range phones, Galaxy A3 and A5, to cope with the impact of Chinese manufacturers, and the HTC One series flagship phones have begun to impact the mid-to-low-end price range. However, the problems faced by Samsung are becoming more and more similar to those of Sony, and it is even on the path of Sony's decline. Whether Samsung will become the next Sony depends on whether Samsung can follow the trend of hardware industry transfer, optimize its own hardware and software gene configuration, find the right market positioning, and shift from industrial thinking to Internet thinking. With the tide coming, Samsung does not have much time left.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.