Actually, Sony had decided to stop working with the Japanese electronics companies for some of their businesses. For example, Sony had wanted to enter the plasma TV industry in the past. But now, they felt it was not worth it.
Because of plasma technology, Sony had neglected to upgrade their LCD technology. This caused Sony, which used to be in the first tier of LCD technologies, to drop to the second tier.
Although Sony's plasma technology was in the top tier, their profits showed that they had suffered losses.
Plasma TVs had always been more expensive than LCD TVs.
When Plasma TVs or flat-panel TVs were just emerging, Plasma TVs' production cost was lower and looked more competitive. The technologies were better, and the profits were higher.
But in the end, LCD TVs' market share increased, while Plasma TVs' market share dropped.
Both are flat-panel TVs, and LCD TVs are much cheaper than Plasma TVs. Many people can't tell the difference when they buy a LCD TV.
Plasma TVs cost more than 2,000 USD, and that's enough for most people to have an LCD TV and a home theater.
That means Plasma TVs had become a luxury product among the TVs.
It's fine to focus on high-end consumer products, as the profits are higher.
But LCD technologies are improving, and with the help of other electronics companies and Wind & Rain Electronics, many of their technologies are on par with LCD TVs.
Although there are still some shortcomings, they are minor, and it will not affect the viewing experience. Also, the cost of LCD TVs is decreasing, and the profits are increasing.
Their plasma TV's R&D cost is higher because there are not many companies in Sony's faction. This caused their plasma TV's profits to drop, and their technologies are still lagging behind LCD TVs.
For example, it's difficult for Plasma TVs to make smaller TVs. Currently, their TVs are still above 42 inches. They can also produce smaller TVs, but the cost will be higher, and the profits will be lower. Why would they be willing to do this?
LCD TVs can be produced from more than 10 inches to dozens of inches. Of course, the mainstream ones are between 20 inches and 40 inches. The smaller ones are generally used as monitors. There are also bigger ones, but they are mainly used as big screens in business places. Ordinary families do not use them at all.
LCD panels are used in a wide range of applications, and the R&D cost is low.
For example, some new technologies developed by others cannot be used directly due to patent protection. But it's not impossible to imitate it after dismantling it. Wouldn't it be a new technology with a little modification?
They could even directly purchase or exchange patent authorizations to shorten the research and development time. These were all good methods.
But what about plasma? Panasonic – Sony is the first faction in plasma technology. The other factions' technologies are not as good as them. In order to maintain their technological advantage, these few companies invested more, resulting in lower profits.
Panasonic was still doing well. Back then, they dominated the plasma TV industry and had a higher brand awareness. Many people who bought plasma TVs recognized Panasonic the most.
But Sony cannot do this as they had joined the industry later. Just relying on Sony's brand will not increase their plasma TV sales. As for the public technology research and development costs, they would still share equally. In terms of core technologies, Panasonic was still slightly ahead of them.
This led to a decline in the plasma TV industry's overall sales. Panasonic's profits were reduced, but they were still able to earn quite a bit. But Sony and other companies' profits are very low.
Now, Sony is in a difficult position. If they withdraw from the company, all their investments will be wasted. It wasn't easy for him to get into the first gear. Even if he fell into the second gear, it would still be a failure.
But if he didn't quit, he wouldn't be able to make much money. Seeing other companies making more money from the LCD industry, how can they not be jealous?
Sony still cannot give up on LCD. After all, their PC monitors, game consoles, mobile phones, etc. all need LCD technology. They are already lagging behind in this area.
That means Sony is the same as Samsung and other companies. They are walking on both paths. But both companies have different priorities. Samsung is more focused on LCD, and Sony is more focused on plasma.
The advantage of having two paths at the same time is no matter which path they choose, they will not fall behind. But the disadvantages are obvious. The focus of the companies will be spread out, and they will have to invest double the R&D and operations costs.
Sony suddenly regretted joining the plasma faction. They had made profits for one to two years, but their LCD technologies are lagging behind. They were also in the first tier when they joined the LCD industry!
Now, Sony's internal department had analyzed that the plasma industry will be hit hard this year. Although Sony will not withdraw from the competition, their sales will be suppressed by LCD flat-screen TVs.
Then why did they join the plasma faction in the first place? A thankless task?
The US sub-prime mortgage crisis had affected the rest of the world, and Japan will also be affected. Sony did not invest much in subprime bonds, but like Thomson, they also have their own credit company for electronics and electrical products.
Normal electronic products do not need to be paid in installments. But for games consoles, laptops, digital video cameras, or plasma TVs, it is common for them to pay in installments.
Due to the impact of the sub-prime mortgage crisis, Sony's credit default rate had increased. Although Sony will not suffer heavy losses, they will still suffer some losses.
The worst part was that the one with the highest default rate was the plasma TVs!
When Norio Ohga saw this, he felt depressed. Plasma was about to become the second biggest pain in his heart. The first pain was the sale of AIWA.
Now, Sony's board of directors had started to debate about Plasma. Some supported Norio Ohga and felt he had made the right choice. Plasma had not failed and was only affected by the sub-prime mortgage crisis. If not, they should still be making money.
Some said Norio Ohga had made the wrong choice and let Sony take the wrong path. Sony's LCD technology had fallen behind, and Panasonic's plasma technology had not overtaken them.
Now, Sony's profits had dropped, and it is Norio Ohga's fault. He must bear the responsibility.
When he had made so much money for the company, why did the directors not reward him? Also, this decision had been made by the board of directors. Why should he be the scapegoat?
He, Norio Ohga, will not lose. He still wants to lead Sony to defeat Wind and rain, AIWA, and Feng Yu!
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