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What's Happening to Sony? (The Rise and Stagnation of Sony) - YouTube
Channel: ColdFusion
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you are watching cold fusion tv
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[Music]
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hi welcome to another cold fusion video
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previously in the last episode of the
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story of sony we saw how they went from
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a failing company making rice cookers
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and electric blankets
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to an innovative group of engineers who
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influenced american society
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with their breakthrough portable radio
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today we'll continue the story from 1960
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with a timeline of sony's global rise
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let's begin in 1960
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sony would expand into the united states
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with the formation of sony corporation
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america
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shortly after this using the transistor
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technology that they had perfected five
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years earlier
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sony would create the first transistor
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television for context
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tvs of the time were still huge because
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they were using massive bulky vacuum
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tubes to power them
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so sony's model was a revolution much
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smaller than anything that had ever come
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before
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in 1968 sony would release their
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triniton tvs
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it had twice the brightness of regular
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tvs for the day and was the greatest tv
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product series of the entire century
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these trinitan televisions were known
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for their great quality
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[Music]
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oh
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the triniton tv system was so good that
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it supported sony's growth for the 30
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years after its launch in 1968.
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before this all japanese products were
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seen as cheap and of low quality
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sony's color tvs changed the perception
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of japanese products
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1975 saw the release of sony's beta max
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home video tape format
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and camcorder the betamax tape system
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was far superior to jvc's vhs release
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later that year
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but it ultimately failed as it had less
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tape running time and was more expensive
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in 1978 a sony executive would take a
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trip to europe to see a spin-off
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technology of the philips laserdisc that
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could play audio
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philips and sony already had a healthy
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relationship since the late 60s and
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decided to pair up
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phillips was a world leader in optical
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video discs and sony had considerable
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expertise in digital audio signal
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processing technology
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when the two companies joined forces
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they would create the digital audio disk
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now known as the compact disc it would
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be released in 1982
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in july of 1979 sonia releases the first
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stereo cassette player
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called the walkerman he is considered
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one of the most iconic music players and
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has sold
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over 400 million units of course there
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were portable music players before the
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walkman but sony's was the first that
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was easy to use
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and convenient
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you really feel the music the sony
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walkman
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is a tiny stereo cassette player with
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truly
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incredible sound
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[Music]
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put on a walkman and see the world in a
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whole new light
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[Music]
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the sony walkman ushered in the
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company's golden age
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it created a brand new culture of
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listening to your own personal music
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outside
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in late 1982 the first cd player was
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introduced to the world by sony
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and just two years later in 1984 they
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would create a portable version
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it was called the disman sony were on
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fire by this stage and according to
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cultural critic
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stephen bailey in this period sony was
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the apple of its day
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and much more by the end of 1988 sony
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had acquired cbs records for two billion
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dollars and renamed it sony music
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entertainment
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and also columbia pictures entertainment
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1993 would be a year that would change
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the gaming landscape forever
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in november of this year sony computer
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entertainment was established
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and one year later the sony playstation
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was released
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it was the first video game console to
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ship more than 100 million units
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the year 2000 kicked off with the
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release of the sony playstation 2.
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it went on to become the best selling
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home console of all time the next year
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sony would establish its own bank
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and sony ericsson mobile now known as
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sony mobile
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2004 saw the release of the psp to
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compete with the nintendo ds
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and the playstation 3 would come two
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years later in 2007
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sony would innovate yet another world
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first product the first
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oled tv 2011 would see the playstation
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veto and one of the first
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4k tvs two years later the playstation 4
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would be released
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and in 2016 the playstation vr headset
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was launched
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according to one patent consulting firm
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sony has 366 patents for virtual reality
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all these achievements over the lifetime
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of the company are nothing
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short of remarkable but as some
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spectators are noticing
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sony has been stagnating a little the
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company's sales haven't been what they
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used to
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and the clarity of their direction is a
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little muddy let's take a look at some
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reasons of why this is happening
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just quickly before we get to the
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company itself we should take a look at
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the background environment sony was
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facing
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when they started to falter in 1990
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there was a devastating economic
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recession in japan
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it was caused by a shift in the nation's
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demographics and faulty central banking
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policies
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the central bank of japan loaned too
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much money pushing up asset prices
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until it all finally burst in 1990
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this resulted in rampant stagflation in
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the country
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wages fell prices stayed stagnant and
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businesses struggled
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it was so bad that there's a name for it
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it's called
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the lost score or the lost 20 years
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because of this recession sony had to
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replace full-time staff with part-time
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staff
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and job security became scarce during
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this time of uncertainty
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and low staff morale sony had to start
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fighting off strong industry
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competition from a rising south korea
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taiwan
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and china so the question must be asked
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why did these countries suddenly rise
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well
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in the 1990s and 2000s the global
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electronics industry experienced a
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structural change
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after the pc and internet revolution the
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industry began to standardize parts and
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outsource production and assembly work
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to companies in low-cost emerging
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economies
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this was cheaper and more efficient on a
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macro scale
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meanwhile most of sony products were
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still being made in japan
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which had a higher cost in the
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manufacturing pipeline than its
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competitors
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all of a sudden japanese products were
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expensive compared to the emerging
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manufacturers
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when questioned on why he didn't want to
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drop prices sony chairman
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akio morita said we are selling diamonds
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at the time this was true as sony
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products were of high quality in the
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early 90s
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but eventually the other manufacturers
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got better at their craft and the
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quality of their products improved
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suddenly there wasn't all that much
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distinction to justify sony's high price
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the next issue for sony began in the
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year 2001
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this is when hardware manufacturing
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began to make room for the endless
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applications of software
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it began with the ipod a device that
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uniquely got music enthusiasts
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tied into software like never before
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amazing little device holds a thousand
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songs
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that goes right in my pocket do you
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remember what it was like when you got
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your first walkman
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you remember that feeling when you got
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the first walkman in your hand it was
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like
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wow well i haven't picked up any mp3
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player
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that has made me go wow okay i want to
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carry this wherever i go
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[Music]
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this is the first thing that makes me
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feel wow
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okay but this particular trend really
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accelerated from the year 2007 with the
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iphone
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with this apple achieved a breakthrough
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innovation in handsets
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it allowed users to expand the
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functionality of their phones
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through applications developed by
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engineers and even individuals worldwide
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so how did sony respond
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nobuyuki ide president of sony during
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the early 2000s
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reacted by trying to combine sony's
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audio and video technology departments
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with its i.t department
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ideas stated that he just couldn't do it
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the company was simply too big
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although he was aware that there was a
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need to shift sony's business strategy
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he could not change the mindset of all
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140 000 employees and managers
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the top leader is not a person with
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supernatural powers he said
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during this time idea even considered
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acquiring apple
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in an effort to save themselves sony has
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recently streamlined its operations
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focusing less on audio and visual
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manufacturing
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unfortunately according to one executive
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who spoke with the times of japan
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quote now that many excellent workers
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have left sony as a result of structural
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reforms
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the company's power of innovation has
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declined sharply
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end quote in the sphere of manufacturing
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sony has been outmaneuvered by the
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koreans chinese
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and taiwanese in fact in the early 2010s
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most of sony's profits actually came
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from their financial services
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and not their manufacturing operations
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in 2013
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it was so bad that some investors
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suggested that sony should just abandon
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their hardware division and just stick
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to making financial loans
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even the entertainment area of the
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company has taken a hit it's fallen into
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a two-way tire with paramount as warner
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brothers surges past
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in addition to this the xperia phone
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brand has had disappointing sales
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and a backlog of sourcing issues and
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this isn't to mention that sony is
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getting steamrolled in the tv department
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by samsung
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in short today sony is losing ground
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everywhere it's simply too large too
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diverse in its categories
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and focus too much on the sub-brand
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names
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with all of that being said it's not all
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bad though
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in late 2016 sony started to turn around
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their smartphone department was losing
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money all throughout 2015
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but did manage to post a reasonable
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profit in 2016.
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they did this by streamlining the phone
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product range cutting costs
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and focusing harder on premium phones
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with profitable margins
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while identifying better target markets
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with this being said
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this doesn't mean that sony's phones are
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doing well versus the rest of the market
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samsung apple and the chinese brands
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still largely dominate
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the brightest spot for sony is the
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playstation 4. it's doing
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very well selling over 17 million units
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in fiscal year 2016.
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the strength of the ps4 has helped sony
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reach its full first year of profit
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in three years the playstation 4 was so
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good that it amounted to 78
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of all profits in q1 of 2016.
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some other bright spots is sony's
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digital camera division and also their
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smartphone sensor division
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sony's smartphone camera sensors are
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used in other popular brands like apple
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samsung lg motorola oneplus one
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and of course the sony xperia range
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there's also talk of a new sony
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smartphone camera that can shoot
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full hd at get this 1000 frames per
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second
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so now that we've seen how and why
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sony's began to falter
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what are some solutions some analysts
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say
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that sony needs to break from its past
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by completely transferring its existing
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businesses to overseas or even separate
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companies
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in a bid to create innovation
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since the playstation is so successful
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perhaps they should double down on that
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and focus on that segment
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things like partnering with content
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creators to make even more killer games
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for the ps4 line
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as well as some intuitive and addictive
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vr titles could really provide some
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growth
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doubling down on differentiation with
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their smart friend camera line does also
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have some potential
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all in all as was seen time and time
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again on cold fusion
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this is a common problem for companies
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their rise is meteoric
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but when they become too large and
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diverse management becomes more
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fragmented and often bureaucratic
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and it becomes difficult to see where
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the next clear step is
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usually when this happens increasing
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competition creeps up from behind to
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steal some thunder
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in conclusion the future of sony is
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hanging in the balance right now
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they've arguably been stagnating for
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over a decade but in the last year the
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company has been starting to show some
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promising glimpses of hope
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ultimately we have to wait and see how
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they react to their environment moving
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forward
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that being said if there's anything that
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we've learned from sony in the last 60
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years from the previous video
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is that they've got a very innovative
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dna so a renaissance is a possibility
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anyways that's what we'll leave the
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story of sony today hope you enjoyed
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that
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i found it quite an interesting history
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to go through and kind of analyze where
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they've been starting to falter
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if you're new here don't forget to
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subscribe to this channel and i also
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want to thank all of you for helping me
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pass a million subscribers i should have
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a little thank you video coming out soon
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oh yeah if you want to see the previous
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video of the origins of sony which is a
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fascinating story i think you really
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should watch that if you haven't already
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i'll leave it in the link below and also
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an end card at the end of this video
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but yeah anyway this has been degogo
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you've been watching cold fusion
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and of course i'll see you again soon
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for the next video cheers guys have a
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good one
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cold fusion it's me thinking
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[Music]
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you
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