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Thursday Nov 16, 2006
Persisent Problems Likely to Strip Sony of Market Share
Ian L. Cooper
Dear American Capitalist Reader,
The biggest product in Sony’s history, with a high-speed Cell microprocessor and Blu-ray high-definition DVD technoloogy in tow, was just released to Japan over the last 10 days. It’s so popular, according to Business Week, that “nearly a thousand would-be [Japanese] buyers had camped out on the sidewalk for a chance at the first PS3s available anywhere on the planet.”
Right here in the States, you can’t even pre-order the system anymore. The product is so popular that Sony, which has plans to ship 6 million PS3 systems, is already seeing demand far outpace supply. But the bullish sign of the times isn’t all rosy for Sony.
You see, high demand may sound nice, but consider that there may not be enough supply. And there’s no telling how quickly supply could be replenished, meaning that impatient buyers could just turn to the Xbox 360 or the Nintendo Wii this holiday season. They will not want to wait.
Plus, it’s already confirmed that not all of the games (800 out of 2000, according to reports) designed for the Playstation and the PS2 are usable with the PS3, as promised. While online upgrades are being offered for the games, it’s highly unlikely the problems will ever be fixed.
The real kick in the pants: The company knew, or “anticipated from the start” that these software issues existed. Unfortunately, they didn’t let the consumer know until November 11, the same day the PS3 hit the store shelves. That’s nice to know after buying the system, isn’t it? The company won’t say when they learned of the software glitch, but are reporting that the PS2 release in 2000 had a similar problem. I think Sony may have rushed the system out of the door in time for the holiday season and to ensure that rivals wouldn’t steal market share. Delaying the shipment again would have left the company at the mercy of competition from Microsoft and Nintendo.
Countless embarrassments later, Sony desperately needs to revive itself. Anymore system glitches could just hand market share to the competition. Other mishaps include the PS3’s delayed release. Origionally promising a Spring 2006 release, Sony pushed back the launch of its PS3 from March to November. The PS3 price was slashed 20%, quite possibly in desperate haste to keep market share.
Sony has two choices: It can clean up its act and ensure that supply can meet demand or risk losing market share to two companies that haven’t had similar problems.
Ian L. Cooper
Editor, EVS / Early Alert Trader
P.S. Just in from our travel correspondents, here's a deal you might want to take advantage of. If you can't, then feel free to forward to a friend or family member… Check out Andrew Cram's website - Rewards Database at http://www.rewardsdb.com/merchant/zzz_shop.html - it lists the best airline malls to earn awards at. For example, say you want to buy something for someone at REI online for the holidays - you'll see that you could earn a variety of points for that purchase from Alaska, American, Continental, Delta, Northwest, United, US Airways, Marriott, or Priority Club - or, if you go through certain online shopping portals, you can even earn up to 3% cash back on your purchases. That's in addition to the miles you'll earn by putting the charges on your mileage earning credit card.
