Shoji Nemoto, an executive VP in charge of technology strategy and R&D at Sony, announced today that the company is planning on increasing their R&D focus. Specifically, Sony plans to invest heavily on cloud computing and display panels. Sony, once the world’s number one TV manufacturer has now slumped to 3rd place while rivals Samsung and LG have claimed the first and second spot. With a drastic decline in LCD pricing and sales, Sony’s television division has resulted in losses for eight consecutive years. Cloud computing has also been a miss for the electronic giant who has struggled to offer a competitive and compelling service to iTunes and now iCloud.

Sony also “won’t hesitate” to buy outside technology, though Mr. Nemoto wasn’t clear if that meant licensing or acquisition of other companies. Last year, Sony spent $5.5 billion on R&D while rival Apple only spent $2.4 billion. For those playing at home, Apple holds a $632 billion market cap while Sony sits at $12 billion.

 “One of the problems is that Sony’s R&D spending hasn’t really led to products, sales or profit,” said Kazuharu Miura, a Tokyo-based analyst at SMBC Nikko Securities Inc. “Any company would want to boost earnings from R&D, but it hasn’t really worked well for Japanese manufacturers.” 

Let’s talk after the jump.

The above statement really hits the nail on the head. The fact that Sony’s R&D is already double that of Apple’s is absurd enough but to want to further invest is even more ludicrous. While Apple continues to invest in select markets and offers a very small product range, iPod, iPhone, iPad, and Mac, Sony continues to be in every consumer segment under the sun. From offering 20 different camcorders, 10 different Blu-ray players, dozens of iPod docks, headphones, etc., the company misses the market by continuing to invest in last generation product segments. This isn’t to say the company shouldn’t make those products but instead of offering entry headphones in $5 price increases which start at $20 and go to $100, the company needs to instead create a good, better, best category. This same policy extends to all of their lines and although they might not be able to be present in every price point, they can instead be confident that they are offering the best at those prices ranges.

Don’t believe me? Look at Apple’s product range and this simple strategy becomes quite clear. With a reduced inventory, consumers will also be less confused as sometimes too many models cause a headache for those trying to weight the pros and cons and end in a lost sale. Of course, a reduced inventory means the ability to greater focus on the products with less supply chain management and inventory woes. Having fewer product segments have also helped Apple tremendously focus its R&D and yield real products that consumers have coveted for like the iPad and iCloud. Sony on the other hand has spent the money with a “me too” strategy which has resulted in a failed tablet initiative and a confusing cloud strategy with different groups (PlayMemories Online, PSN, Music/Video Unlimited) and confusing segments.

So while more money on R&D might seem like a good thing, a lack of focus on Sony’s behalf, mixed with a dizzying array of product lines which don’t always complement one and other in a cohesive ecosystem results in no significant gains for the company who hasn’t had a hit product with consumers in years.

Discuss:

Does Sony need to spend more money on R&D?

[Via Bloomberg]