Sony Racing Apple To Develop 'a New Kind of TV' 273
PolygamousRanchKid writes with an excerpt from SlashGear about Sony's efforts to reinvent the television set — a task many suspect Apple is focused on as well. Quoting:
"'There's a tremendous amount of R&D going into a different kind of TV set,' CEO Howard Stringer told the WSJ (in a paywalled article). ... [W]hat Apple and Sony agree on is that the traditional TV paradigm must evolve if the segment is to become profitable again. A new model is 'what we’re all looking for,' Stringer confirmed, suggesting that 'we can’t continue selling TV sets [the way we have been]. Every TV set we all make loses money.'"
Try this link to go around the paywall (Score:5, Informative)
You're welcome.
Re:Marketing-driven products (Score:5, Informative)
You need to think like a big corporation.
When they say: "Every TV set we all make loses money" it doesn't mean what you think it means.
What they are really saying is "Every TV set we all make doesn't continue to make us money once it's been sold"
Re:Losing Money? (Score:2, Informative)
Re: Every TV Set Loses Money (Score:2, Informative)
Exactly. Saying every TV set loses money suggest that each additional TV they sell will put them even further in the red. That happens when the cost of parts, labor, repairs, shipping, and other things attributable only to that 1 specific TV is more than what they sell it for. In the case you are suggesting (which is what I believe is really going on), those other things are sunk costs. Selling additional TVs might not be enough to cover those costs, but it covers at least some of those costs, thus the company is better off with each additional TV sold, and it's still in their best interest to sell as many as possible.
Re:I hate it when people say things like: (Score:5, Informative)
God dammit, Slashdotters are so dumb about corporations and how they work. Even if you're anti-corporate you ought to know a handful of things about your enemy.
Suppose you are a corporation with basically one physical asset: a $10 billion TV factory. Raw materials and labor go in one side, and finished TVs come out the other. Let's even ignore R&D and marketing.
What you'll learn very quickly is that you can't really control the price that you sell the TVs at. Since you have competitors also making TVs, and there is only so much demand for TVs out there in the market, you're constrained. Maybe some of your competitors can build TVs cheaper than you because their labor is cheaper, or they have a better factory, or whatever. Maybe everyone expects huge TV sales due to some new technology and the sales never pan out, and there are just too many TVs in the market.
So your brilliant idea is to shut down the factory the moment that you can't sell the TVs for more than the cost of making them. In the real world it isn't always so simple. If you completely abandon the TV market, you'll have to sell your $10 billion factory even though nobody wants a TV factory right now -- you'll be lucky to find a buyer at $1 billion. If you decide to sit on your factory (still paying for maintenance, security, property taxes, etc), you'd have to get rid of your employees to really save money, and then you'll need months of lead time to re-hire people if the market picks up again. Not to mention that you'll lose your position in the marketplace -- everything from distribution contracts to your mindshare will evaporate. Nobody really wants to buy or distribute a TV from a company that only makes TVs some of the time.
There is always a point where keeping things running isn't the best decision, especially if you think the market will never come back (the buggy whip situation). I'm just saying that the point where you start selling things for less than it costs to make them isn't always the time to abandon production. Sony will be happy that it kept its TV division running if the R&D guys can come up with some new feature that everyone actually wants to buy.
Bottom line: yes it's possible that they really are losing money on each TV. Depending on how you interpret the mysterious future, they might lose even more if they stopped making them.