![[Prophet - Brand, Marketing, Innovation, and Design Experts]](/images/layout/logo88.png){kind=logo}
Why wasn’t the iPod a Sony brand?
In October 2001, Apple launched the iPod which was an instant success and sold over 220 million units over the next eight years. The iPod became the exemplar for a new entertainment category.
Why was it Apple and not Sony that created the iPod? Sony has always been the brand for portable personal music using clever compact vehicles. From the portable radios of the 50s to the Walkman introduced in the late seventies and beyond Sony, has been the innovator. The iPod was classic Sony.
The answer is timing. Apple got the timing right by entering the market when the technology came together. Of course, the Apple design flare, its brand, and its iTunes store were all important, but the timing was the key. Technology that was just emerging made the Apple iPod feasible. In particular, one enabling advance was an inexpensive, 1.8-inch hard drive from Toshiba that could hold over one thousand songs.
Remarkably, Sony introduced not one but two iPod-like digital music players at the huge Las Vegas Comdex trade show in fall 1999, fully two years before the iPod appeared. One, developed by the Sony Personal Audio Company, was the Memory Stick Walkman, which enabled users to store music files in Sony’s memory stick, a device that resembled a large pack of gum. The other, developed by the VAIO computer group, was the VAIO Music Clip, which also stored music in memory and resembled a stubby fountain pen.
Both failed in large part because the technology was not yet ready. Each had 64 megabytes of memory that stored only twenty or so songs, and each was priced too high for the general market. Timing was not the only problem. Not only did the two offerings confuse the market, but the lack of cooperation of Sony Music which was more concerned with avoiding piracy than with the success of the new digital product also were factors. But timing was pivotal.
Timing is a factor in most efforts to create new categories or subcategories especially in the high tech space as the research for my book Brand Relevance: Making Competitors Irrelevant showed. In fact, Apple had its own premature products. One was the Newton, a personal digital assistant introduced in 1993, designed to manage schedules and lists using a human writing recognition system. Despite terrific introductory marketing, the product failed because it was priced high, was both unreliable and sluggish, and had a hard-to-read screen. In 1996, Palm, with more advanced technology and a less ambitious product vision, came out with the PalmPilot, a simpler PDA that was a resounding success.
An implication is that a firm needs to be close to technology and be capable of determining exactly when advances needed to support a product concept will emerge. That involves people who are conversant with the technology and are following it through various channels, a system to collect and analyze the intelligence that emerges, and a decision process that encourages action.
Another route is to be engaged in the technology so that its progress is not only monitored, but influenced. Samsung’s engagement in semiconductor development and manufacture has lead to new product enhancements in its consumer electronics and cell phone products.
The best concept needs to get the timing right. The market, the organization, and the technology has to be aligned. Arriving too early or too late can be fatal.
Posted January 3, 2011 / Permalink
/ Subscribe (e-mail)
/ Subscribe (RSS)
Tags:
apple
brand relevance: making competitors irrelevant
itunes
palm
sony
Share •
Comments
Interesting thought. Certainly the battle between Sony's Beta vs. VHS would support that hypothesis. Sony would probably prefer to develop their own technology. But I think had the Toshiba technology been available two years earlier Sony would have adapted it because it made such a difference. Further, most consumer electronics firms have little choice but to use best-in-class components. Dave Aaker
Would you say the dotcom boom and bust had anything to do with what you call 'timing'? Did it prepare the market for the higher level of digitized experience? The subsequent fall of technology stocks and the doom in the market, made consumers stick to the tried and tested model of ipod, rather than rely on other products? Also new products/brands may not want to spend much on the marketing effort immediately post 2001 ? Thus helping Ipod secure the market with sole survivor strategy.
Good points. Timing involves not only technolgy but the market, the competition, and the firm's willingness and ability to compete. All these were affected by the burst of the dot com bubble. The lack of competitor interest is important. See my case study of the Chrysler minivan when my Brand Relevance book is released this month. Dave
Great analysis of a question that anyone in marketing has probably asked themselves!
An interesting followup question would be why Sony didn't stick with it. A digital music player was an obvious future product in the core of Sony. Why didn't Sony "probe and learn" or engage in experiential development by making continuous improvements until a digital player clicked? (Think Windows 1 and 2...)
Hadn't Sony heard of disruptive innovation: I am sure that Christensen's books were on some shelves there...
I think it was hard to maintain a product visoin in the face of a competitor down the hall and the fact that Sony Music was standing in the way. One of my findings in research around my Brand Relevance book was that people often give up on products because they assume that a breakthrough solution to a problem will not occur. P&G, for example, tried to kill Tide 5 years before a breakthrough occured with an under the radar research effort. Dvae Aaker
The Samsung mention is important; separating design and manufacture is not a free lunch.
I couldn't agree more. It also helps to explain why electric vehicles are off to such a painful start.
I fully agree to your arguments and also that timing is an important factor: but it always is. What is more fascinating, especially when it comes to tech products, is simplicity in usage. I'm still convinced that Apple's success with iPod/iPhone/iPad largely depends on the iTunes software. Together with the iPod it was the first system for music syncronisation that could live without a manual. Besides it established a deep link between the User and Apple. Once an iPod-User, you wouldn't think about buying music at Amazon or elsewhere. All successful companies have established micro economic systems of dependancies between themselves and their users: Google with Adwords, Apple with iTunes/Apps, Amazon with its shop and Kindl, ... So Sony may have succeeded as well in the digital music player business if it had developed a break-through software for syncing, buying and sharing music in its "Sonyverse" - at the right time.
Re: Samsung. Yes the best way to be informed about technology is to be a player--also you get to lead. Re: electric vehicles. There is a chicken and egg thing as well. If you wait too long, it will not happen. Plus you lose your change to become the Prius of the day. So it is a tough call.
Re: iTunes. I agree that Apple's key strength is not only the iTunes structure but also all the Apps that surround Apple's products. Their ability to create a community of apps is incredible and the reason for their success. However, in my view Sony could have been a player if their timing had beed better and if Sony Music had been an asset instead of a liability.
David: always an interesting topic! I was at Sony for most of the 90's and can add two thoughts to this analysis.
First, the iPod/iTunes combo went against Sony's culture of linear tech. They were a tape company through and through - I recall the brain trust dismissing the then-emerging Rio as "a toy that no audiophile would bother with."
Second, as you've noted, one can't underestimate the stranglehold that Sony Music had on the collaboration. Schulhoff was the Chairman in those days and he leaned towards the music group first. Sony could never have pulled off a collaboration w/ Bertlesmann and the others. It would have violated everything they thought their synergy was based on - a proprietary, closed ecosystem.
Thanks!
Re: Sony in 90s. You are right. Sony was so analogue because they could own that stuff. When an area went digital it was no longer ownable. So Sony promoted the "Digital Dream Kids" in the 90s but their heart and strategy was not in it. So that probably held back the firm from supporting the new products. No question that Sony Music which ironically was supposed to generate a lot of synergy did the opposite. Dave Aaker
David,
Here's my perspective — technology and market timing notwithstanding. Apple has been one of the most innovative brands in the past 10 years. Clearly ahead of Sony. Great brands have instincts for products that have strong market potential. Such is the case with the iPod. Where Sony stumbled, Apple prospered. A significant factor to consider is the “cool factor” that sets Apple apart. Sony is a quality brand but it isn’t a cool brand. In the MP3 player space, Microsoft’s Zune isn’t cool either which is why is has a 2% market share. Apple has a keen sense of understanding customer needs and how to create and market innovative products that are again, “cool”. Maybe that is also why Apple's stock is selling for $333 per share (Jan 6).
@ckburgess
Re: Coolness. Your are right, there are many reasons for Apples success with the iPod and design, easy to use, iTunes, Apple brand coolness etc. As I point out in the Brand Relevance book, Jobs created a new category or subcategory at least five times, an incredible achievement. However, in the 80s Sony was cool and innovative. The surprise of their failure in the MP3 market dispite having a two year advnatage was the the technology misstep based on timing. Even if the timng had been better, they would still lack many of the Apple qualities but might have been a real player and had a platform for an iPad etc. as Apple did.
I'm not sure that market timing for technology isn't largely dictated by the emergence of the technology itself... as soon as it's economical for a new technology (let's say solid state hard drives) they'll start appearing in products. Some of those products will fly and some will crash and burn. There are many companies waiting years for the inflexion points.
So it helps to get timing just right, but there must be more to it than that. One of the enormous distinctions between the iPod and its competitors was iTunes; the software, the store and the digital rights agreements with the record companies. I think there's a stronger argument that melding the product with a service - aka an entirely new business model - had more to do with the runaway success of the iPod than timing.
I'm not sure that market timing for technology isn't largely dictated by the emergence of the technology itself... as soon as it's economical for a new technology (let's say solid state hard drives) they'll start appearing in products. Some of those products will fly and some will crash and burn. There are many companies waiting years for the inflexion points.
So it helps to get timing just right, but there must be more to it than that. One of the enormous distinctions between the iPod and its competitors was iTunes; the software, the store and the digital rights agreements with the record companies. I think there's a stronger argument that melding the product with a service - aka an entirely new business model - had more to do with the runaway success of the iPod than timing.
I agree. In my book Building Strong Brands I studied the Saturn brand success and concluded that it was based on seven factors each one of which was indispensible to success. Your point that even had Sony got the tech right they still would be missing some ingredients is a valid one. But the timing killed all chances to evolve toward if not breakout success, at least to be a player. That would have had a lot of strategic positives for Sony.
David,
I really enjoy your blog, but I believe you've ascribed Sony's failure in the mobile music market to a technical oversight, not a cultural arrogance and design myopia that has characterized Sony's failures in virtually every consumer electronics product segment for the past 30 years.
As I detail in my blog response to your analysis (http://orange-envelopes.com/blog/ ) Sony didn’t fail to extend their domination from portable cassette and CD players to MP3 players because of timing. They failed because they lacked vision. They perceived the market for mobile music as just another pretty device. Apple proved that the market actually wanted a thoughtful and delightful music experience. The difference between the two is software, not hardware. And Sony has never demonstrated nor developed the capacity to envision and create a software experience that delivered more than frustration, confusion and exasperation.
Good points. Jobs has vision, a design flare, a sense for the larger system involving iTunes and apps. He is a genius and that is why he has six or seven times created a new category or subcategory. But my point is that a critical ingredient to his success is timing of technology. He is on top of it and has rarely been off the mark. This was particularly true for the iPod.
Interesting to compare Sony and Apple over time. In the 90's, Apple was flat on its back and Sony was one of the top 3 brands in the world. The rumor was that Apple was seeking to be bought by Sony. Now, things are reversed - even the rumors have reversed!
Can we link to the respective founders? Mr. Morita had his stroke in '94 and handed the reins to Ohga, his COO. Things were fine for a while. Now, Jobs is stepping down, handing control to his COO.
Good point, there are a dozen forces that apply but the value of a gifted CEO cannot be underestimated and Jobs may be one of the best in the last three decades.
From my perspective with 10 years of experience within Sony elec. and Sony Ericsson - the downfall of Sony as a portable Audio giant is threefold.
First, Sony Elec. feared challenging the existing business model of Sony Music. Digital represented a massive treat to their Sony music business; Sony lost a massive first mover advantage by pushing the ATRAC format (Basically MP3 with DRM) too long.
Second, Sony Elec.is a hardware company and not a Software Company. The heroes and legends within Sony are the product designers not the SW designers. To take a new fresh industry approach like Ipod required a company with a SW heritage, which Sony did not have.
Third, One Product = One need. Sonys founder Morito said something like “Sony only makes money in order to give freedom to the engineers”. Sony always tried to overdelivery on that one and only need. Apple took a different approach - Start with simplicity, then add regardless of need. IPhone being the best example.
Christian, nice insight. I also think that Sony dispite the "Digital Dream Kids" line never had their heart into digitabl because so much of their equity was tied up in analogue. Dave
Inspired by Watson's triumph on Jeopardy I pulled out Kurweil's "The Singularity is Near" - his take on the eventual triumph of machines over man.
On page 3 of the prologue the author notes that "I realized that most inventions fail not because the R&D department can't get them to work but because the tiing is wrong. Inventing is a lot like surfing: you have to anticipate and catch the wave at just the right moment."
Kurzweil would agree with you that Jobs is a great surfer!
I love the catch the wave metaphor. It suggests also that there needs to be a way to predict when the wave will occur.
Weren't Sony's products depending on the brand and not the product? And wasn't Apple depending on the product and not the brand?
In 2000, Sony was the market leader for various electronics. Today, Sony has reached it's peak but the brand still does best in certain categories. It is becoming market challenger to existing brands like HP, Dell etc. Sony's dependence on the brand name remains, but not majorly. More focus has been done to not make the consumers feel that they should buy the product, but they should as it's what they wanted.
If the product can build the brand, Sony had been too late in beating Apple, and it has been difficult to still do so. What Sony can now wait for is creating a niche product, targeting those consumers, who are not Apple/HP/Dell loyal.
I am not an anti-Sony person as I am still learning and understanding the markets. I wouldn't mind seeing criticism to my insight.
Hreen, in the 80s Sony was driven by product innovation but since then it has relied on brand, you are right in my view. The question I struggle with is why is Sony such a strong brand in both Japan and the US dispite weak innovation and missing cell phones, iPods, flat screen TV etc. etc.
Great post David. Do you think perceptions of core competitors was a factor at play here in the timing of the launches?
For instance, would Sony have had a fundamental issue embracing anything from Toshiba when they compete in (some) same sectors?
Would the Sony instinct have been - "do it first" ??
But would the notion of embracing Toshiba technology to enter a new market (portable personal music) be much less an issue for Apple?
Would the Apple instinct have been - "get it right" ??
— Added by Adam Joseph on January 3, 2011