TechScape Our story begins like this:
Sony’s product design and innovation credentials are unsurpassed. The Walkman changed our lives and how we listen to music. The Trinitron color TV became a status symbol in our living rooms, the Sony logo was omnipresent on our jogging suits and cars and the VAIO laptops went head-to-head with Apple’s for the trendy business and consumer set.
Hewlett-Packard’s reputation for innovation is also top-notch. Founders Bill Hewlett and David Packard were the first technology entrepreneurs to build a global business from their garage in an area, Silicon Valley, where it became the ultimate brag to have started your business at home and taken it right through the roof.
Over the last 40 years or so, Sony and H-P have rarely competed directly in a key core business sector. Sure, there’s been the occasional overlapping product rivalries in the laptop field between H-P’s large, business laptop line known for their dependability and Sony’s sharp, more consumer-oriented VAIO notebooks. But mainly both global brands have tended to their own focused businesses.
Sony was superlative in consumer electronics while H-P was tops in enterprise and to a lesser extent consumer computing. They both played nicely yet separately and didn’t represent a distraction or irritation to their parents.
This is about to change, as both giants have been in training and are now beginning sparring for all-out warfare.
War is waged for the nerve centre
The real basis for conflict begins some time ago when both companies decided that their future lay in providing the best consumer and business products for the digital home. Both have jumped to the conclusion that the nerve center of this gigantic marketplace is the living room; our living rooms. And they are betting the farms on this market opportunity.
According to Kevin Frost, H-P’s veep for consumer products in EMEA, “We’re moving to total DE (digital entertainment) pushed by digital audio, images and video—after all it’s been estimated that more than 260 million digital still images alone are captured every day.” That’s a mind-blowing amount of data that needs to be stored and accessed on a regular basis and H-P is keen to supply the products that will make that accessibility happen. "We have a very PC-centric vision of DE," Frost says.
But then HP would have that kind of vision, wouldn't it? Sony is an entirely different matter.
“Our experience of entertainment and devices has changed beyond all expectations,” says Nicolas Babin, Sony’s director of corporate communications Europe. “We intend to lead by offering new entertainment possibilities through innovative technology in products and services. We thrive on the challenge.” According to Babin, Sony’s success comes from its ability to satisfy consumer’s needs first in the analog then in the digital worlds.
Once inside the home’s Command Central, the thinking goes, Sony will cross-sell and up-sell its products to every member of the family, whether they are playing games, listening to music, watching TV or a movie or surfing the Net for business and pleasure.
Sony has a distinct advantage looming here as it also provides content — games through its PlayStation brand, music through its company-owned record labels, movies through its film studios and legal music downloading through its new Connect service. H-P’s advantage comes from its established position in the computing world.
Sony is extending its reach into H-P’s backyard which began with their recent strong foray into the notebook/laptop realm where H-P gets a significant slug of its revenue.
But Hewlett-Packard is not standing idly by:
Recently, H-P flew this writer and more than 70 other journalists from around the world to Monte Carlo for a “Spy Challenge”. How do you get that many journalists to take time out and attend your product launch? Fly them in, handling all the travel details, put them up in the hyper-elegant Hotel Hermitage and create a fun and interesting day out around Monte Carlo competing against other teams of journalists in a James Bond-type hunt for Dr. Doom. Armed of course with H-P’s new dv1000 laptop and top-line H-P digital camera, seven teams of eight journos each roamed the hilly, harbor town for several hours on different courses following clues while hoping to catch the bad guy and win a prize at that night’s posh gala dinner. Never mind the preceding several-hour Power Point pitch in a stuffy room; we were all excited to be there. This was a very well-coordinated event.
Shortly thereafter, Sony held its own launch at the Royal Academy of Art in London. The event was also beautifully organized and highlighted Sony’s massive new product line while featuring chats from the top Sony management, product managers and even from Sony partner Intel.
The battle lines are at last drawn and are producing the first blood now as the companies shotgun out their new products. Will Sony maintain its brand supremacy or can Hewlett-Packard out-innovate its Japanese rival?
While opening one Sony box, I got a strange feeling of anticipation and excitement. This is the Holy Grail of Marketing which Sony has mastered. If you can make your customers feel this way when they’re just opening the box, then deliver on their expectations once they have the product out and are using it … well then, you’ve accomplished something very precious and rare. And Sony has.
H-P meanwhile, has a clear and discernible advantage in terms of its branding and customer loyalty to business users.
Now Sony has launched a plethora of beautifully designed new devices designed to make us “feel at home with VAIO” as Sony’s tagline puts it. From a series of new entertainment-oriented VAIO laptop lines to desktops, a first from the Japanese brand—and a home server product that consolidates all media in one place, to sizable new Sony plasma screens (some as big as 50 inches) and LCD’s for integrated use with all their products, Sony has put together an impressive multiple-product line where the compatibility will presumably be seamless.
And finally, the new VAIO Pocket is touted as the “iPod Killer” and it’s easy to see why. Apple should be afraid; very afraid indeed.
However, the new H-P level of design embedded in its new notebooks is a step forward. H-P has in some small ways borrowed a designing page from Sony and other consumer electronics companies. This is precisely what it must do to give Sony a run for its money in the consumer products sector where Sony reigns supreme.
H-P has a strong reputation for technological excellence. Their founders conceived and built advanced products like oscilloscopes. This deep-technology experience will serve them well in a head-to-head battle with the leading consumer electronics’ design company. But they must not forget their roots.
Launching a line of truly plug and play products, Sony has proven the possibility for the consumer to take a product, even an advanced electronic/computing product, right out of the box, plug in a few components and be off to the races. This has always been the oft-chased but little found ideal for companies like Sony and H-P.
Power consumption is still a serious problem with both lines. But all consumer electronics on the market badly need a quantum leap in battery life and to offer the consumer something over five hours per battery charge.
Sony has incorporated its new “VAIO Zone” into the desktop as an alternative media player to Microsoft’s omnipresent offering. For even the dominant Microsoft this is an ominous threat because Sony designs better products in the long run and theirs aren’t typically released with bugs included.
Both H-P and Sony laptops were frustratingly complicated in terms of connecting to the Internet and getting online. Plug and play? For Pete’s sake, this function is plug and pull hair out while getting an excruciating migraine. Trying to connect to my wireless LAN, usually a snap for any new devices I’ve added, was challenging and time consuming. These brands simply must make their products easier for the end-user.
H-P maintains the upper hand in the enterprise computing arena with business consumers, but Sony wields an almost unbreakable hold on the consumer electronics and entertainment sectors. This will make this struggle very interesting indeed.
User mobility, a benefit Sony practically invented with the Walkman, will be central. H-P is no slouch in this area either, claiming inventor status of the iPaq PDA (through the swallowing of competitor Compaq).
A major Sony advantage is its increasing strength on the content side. Their ownership of film studios, record labels and online distribution channels means they might be able to take out the Apple iPod, competitive H-P product line and even Microsoft’s ubiquitous Window’s Media Player without getting their hands dirty. H-P doesn’t have this potential but instead sticks to its knitting. which can also represent an advantage at the end of the day. Sony has put together a powerful control over both distribution (the devices) and content (movies, TV, songs and games) which could allow them to be anti-competitive; so a great strength might also be a terrible weakness, if the anti-trust regulators get involved.
The convergence of devices, user applications and these two huge markets makes this competition particularly important. Like the classic clash between JVC’s VHS format and Sony’s certifiably-better Betamax format, the winner will go on to experience a full-nelson on the consumer’s mind, buying power and wallet.
Sony with its decades of consumer electronics experience and time to get their design right has an almost insurmountable head-start. Insurmountable that is, if H-P cannot transfer the long-time allegiance and brand loyalty of a huge customer base who has used its desktops at home and at work and travelled on business with their laptops all while printing their photos, correspondence, etc. on the market-leading H-P printers.
This will not be boring. ®
Bill Robinson has appeared on CNN, PBS, Bloomberg and had his own segment on SKY News commenting on high-tech and marketing issues. He has written columns and articles for FORTUNE Small Business, The Financial Times, Marketing Magazine (UK), Forbes.com, The Moscow Times, Cisco Systems iQ Magazine, United Airline's Hemispheres Magazine and Upside Magazine. Bill may be reached at: firstname.lastname@example.org