The Sony Tax
Last night I returned from Best Buy with a 1-Gbyte SD Card for which I paid a whopping $60 after rebate. Thankfully my new Treo 650 (see, “Treo 650: First impressions”) sports an industry-standard memory card slot. Not everyone is so lucky. Many pay the Sony tax to use Memory Stick. Hopefully the giant in consumer electronics will return more to an innovation model compared to the role as tax man that’s been more prevalent of late.
A while back, I advised first my Sister and later my Mother to choose a digital camera that featured either a CompactFlash or SD Card slot. But we were long a Sony family – a trait that I kicked a couple of years back – and their first choices were Sony cameras. In this case I argued that the CCDs used in the Sony cameras were inferior to other products, but my most vehement argument was based on the memory card. Sony’s proprietary Memory Stick cards continue to sell for a heft premium over the industry-standard alternatives. I’ve yet to see a 1-Gbyte Memory Stick for less than $120. And I didn’t buy some off brand. I bought a SanDisk SD Card. Fry’s has had 1-Gbyte SD Cards advertised for $50 and today featured a 128-Mbyte card for $7.
Somehow I’ll have to refrain from telling my sister “I told you so.” Unfortunately for Sony fans, the company continues to be more interested in royalty streams in many cases than in innovation. I gladly paid more for a Sony Trinitron TV back in the 80’s because the aperture grille with vertical slits and the single-lens electron gun produced far superior images to the shadow mask and 3-gun system used by competitors. I continued to pay a premium price for the innovation found in Sony products — until a few years back when the company’s focus on innovation seemed to change.
At some point, reaping the premium for more innovative products wasn’t enough for Sony. The company focused too much on royalties from competitors and third parties. Perhaps it started with the Trintron which was licensed to some competitors. Surely the company missed out on the VHS royalty stream, but scored mightily by getting key intellectual property adopted into the CD era.
The royalty focus has made Sony a major obstacle to progress when it doesn’t get its way in standards bodies. In “HD Stalled,” for instance I recently described the impasse in high-definition DVD technology. Moreover, Sony along with CD partner Philips, held recordable DVD back for several years.
Hopefully, not all is lost with Sony because it still shows flashes of greatness. Perhaps the company performs best when in the underdog role. Entering the game console market as a decided underdog to Nintendo, Sony had the foresight to use CD media and later in the Playstation 2 to make the system compatible with first-generation games. Nintendo stuck with proprietary media that meant its consoles wouldn’t play music or videos, and until recently ensured each new console or handheld would not play older games.
By most accounts the Sony’s entry into the handheld game market will equal the Playstation’s console success – despite the incredible success Nintendo is having with the latest Game Boy – the Nintendo DS. I was talking with Richard Dougherty, engineer turned analyst with The Envisioneering Group, about several technology trends. About the Playstation Portable, Dougherty said, “I had my jaw drop open more from the Playstation Portable than from any other device in ten years.” I just hope Sony looks at the success it enjoys in gaming and takes that strategy to the rest of its business.
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