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Fri, Jan 13, 2006 - Page 12 News List

Sony's missed `iPod' opportunity provides a lesson


Sony Corp's failure to invent its "own iPod" before the arrival of Apple Computer Inc's device should provide a lesson to other Japanese firms about the danger of being caught napping by foreign innovators, a government minister warned.

Heizo Takenaka, Japan's Minister for Internal Affairs and Communications, said Apple's lead over Sony, the inventor of the Walkman, in digital music players showed the need for wider reform of business practices and regulation.

"Apple's iPod provides a pointer to future possibilities as well as a valuable lesson," Takenaka said in an interview with the Financial Times published yesterday.

Net concept

"Although it would have been natural for a Japanese electronics company to have developed the iPod, unfortunately, the concept of distributing music over the Net did not take off in Japan, so it was Apple rather than Sony that developed the iPod," he said.

Sony had indeed launched a digital player before Apple but failed to capitalize on it because of obstacles in developing the music download market in Japan, the newspaper noted.

Sony, an icon of Japan's postwar boom in technological innovation, is now struggling to reverse a slump in its fortunes by slashing 10,000 jobs as it heads for a annual loss of ¥10 billion (US$88 million).

Takenaka said that Japan's telecom and media industries needed to revamp outdated business practices and improve regulation.

This could bring a five-fold expansion in annual sales for the two markets in Japan, he estimated.

"The media market is about ¥4,000 billion, the telecoms market is ¥16,000 billion so together they are ¥20,000 billion," he said.

Fighting frantically

"Instead of continuing to fight frantically over this market, there is an opportunity to grow it to ¥40,000 billion or ¥100,000 billion."

He noted that US giant Time Warner's revenues alone were more than those of the whole Japanese media industry.

Takenaka said he had asked a special taskforce to draw up recommendations on reforming business practices and regulation by the end of June.

He believes outdated business practices, vested interests and regulatory obstacles are hindering the full development of goods and services that harness new technology and the Internet, the newspaper said.

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