After posting another year of record losses and closing all of its e-reader stores outside of Japan, Sony has announced it will be focusing on its e-book business within Japan.
Despite enduring losses on nearly all of its electronics business, the company’s new boss Kazuo Hirai has said he is determined to keep Sony’s electronics sector afloat.
The overseas closures are part of the company’s reorganisation in an effort to save ¥10.1bn (£60m) annually. Sony posted a ¥128.4bn net loss for the fiscal year to end March 2014; it has been unable to earn a profit for three consecutive years. It has already sold off its unprofitable PC business and it will shed 5,000 jobs in the near future.
Once an innovator in the e-book industry— in 2004, Sony was one of the first companies to offer a standalone e-ink e-reader, the LIBRIe, a year before the release of the Kindle—the electronics giant has fallen behind competitors because of poor reader satisfaction, commentators said. Customers worldwide complained that Sony’s devices make browsing and purchasing more difficult compared to rivals. “The [Sony] Reader’s software experience was infamously poor,” a Tokyo e-book industry insider told The Bookseller on condition of anonymity. “The hardware was still OK and that was the problem. There are rumours Sony will rectify this in Japan with new software this summer.”
But even within Japan, the firm has been losing out to rivals. “Amazon is way ahead in terms of readership in Japan, with Apple Books second and Kobo in third place. Others like Sony are way behind—almost insignificant,” said the source, who suggested that Sony’s Japanese Reader service might be pulled.
Japan industry expert Francis McInerney, managing director of North River Ventures, said that to survive, Sony would need drastic restructuring. “Sony has to fix its operating fundamentals and get clouded—and quickly,” he said, referring to data clouds used more effectively by rivals. “It cannot compete with the likes of Apple who are eating up all the profits in the market.”