It's been a couple of weeks since CES, but I thought this was an interesting article: blogger Jeff Yang comments on the decline of Japan as a consumer electronics powerhouse in favor of Korea and eventually China. During the 2008 fiscal year, Sony, Panasonic, Toshiba and Sharp lost a staggering total of $12.1 billion. At the same time, Samsung alone earned $9.64 billion. What could have caused this shift in power?
N'Gai Croal suggests that product ecosystems are perhaps more important than the products themselves now: "Back then, it was all about building the best product. But in a digital era, it's all about the network effect -- it's not as important to consumers that any individual product is superior, so much as that all of your different products work well together." In addition, some say Sony's insistence on proprietary formats such as Betamax and Memory Stick has worked against them by hindering adoption (maybe I'll do another post on Blu-ray sometime). Then again, proprietary formats don't necessarily prevent products from achieving widespread adoption. Apple has a long history of proprietary hardware and software, locking users (willingly or unwillingly) into their product ecosystem. Why, then, has Apple succeeded where Sony failed? Is it possible for proprietary formats to win over open-source or common standards in the long run?
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