Sony lost the spot as the leader in portable music players when it failed to create a product like the Apple Inc. (NASDAQ: AAPL) iPod in 2000. Apple was still a small, weak company. Sony was still the world’s most powerful force in consumer electronics. It launched the PlayStation in 1994 and its predecessor in 1979. Sony was also a leader in the television and digital camera businesses.

Sometime near the beginning of this decade, Sony lost its way. It did not use its brand and leverage to keep its No.1 position in consumer electronics. Instead, it spread management attention as it diversified into cyclical businesses like movie-making.

The Walkman lost its relevance as a product years ago. Sony has now decided to kill the cassette version of the product. The current crop of the device which has just been built will be the last. It will still market a very limited number of the devices in Africa and, perhaps, China. Twenty-six years is a long time for a consumer electronics device to stay in the market.

The Walkman may be the best symbol of the demise of Sony. The fall from grace is evident in the company’s stock price which reached $155 in early 2000. The shares trade at $33 now.

There will be many histories of Sony written and most will question why the company was not more aggressive to court music companies and create its own iTunes store. Sony already had the relationships with music publishers. Sony was a music publisher on it own, but that should not have blocked its path toward a digital content market place for itself and its peers. Its digital version of the Walkman came to market too late. Apple had already built a big lead in at that point.

The burial of the Walkman signals the death of Sony’s own ambitions in the portable multimedia device industry. It will be a case study at business schools for decades to teach how a company can lose a market it has dominated.

Douglas A. McIntyre

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