Japanese news agencies are reporting that Sony is going to begin a massive layoff campaign that will cut 6% of its total labor force. By March 2012, the company intends on cutting 10,000 jobs and nixing a few projects that are not profitable.
Sony is already restructuring their company by selling its chemical unit and merging their LCD television business with Toshiba. The company is bleeding money and recorded a large loss of 2.1 billion dollars from October to December 2011. The main question to be concerned about is how will these cuts influence their once mighty e-reader division?
Sony once dominated the e-reader market and had a large following with their 500 and 505 models. They were one of the first major companies to make a splash with e-readers and have them sold in a retail setting. It took their competition such as Amazon and Barnes and Noble YEARS to migrate into store shelves. In 2009, Sony followed up on their e-reader offerings by producing the PRS-300, 600, and 900. During this time, Amazon was starting to garner more market share and seriously began to devote company efforts into a vibrant ecosystem for digital content. By the time the Sony PRS-350, PRS-650, and PRS-950 were released in 2010, and the models still retained very loyal users. 2010 was a pivotal year for e-readers because new models such as the Nook and Kobo were released. The writing was on the wall for Sony because cheaper rivals allowed books to be purchased right on the device, while their e-readers required Adobe Digital Editions and shopping for books on your PC.
Sony began a serious change in its e-reader strategy in 2011 by only releasing one single model. This was the first year since the company started actively developing e-readers that it released only a single unit, instead of three. Soon after the PRS-T1 began hitting the stores, it immediately began to see price slashes. Six months after its release it ends up in the bargain bins, and stores like Best Buy have officially proclaimed the device discontinued.
Amazon, Barnes and Noble, and Kobo are making it hard for anyone to compete in the North American e-reader space. Most of their models now retail for under $100.00 for a solid device and companies like Sony are struggling to adapt. The PRS-T1 struck a cord with customers because it allowed books to be borrowed from the library via the built in Overdrive app and millions of free books via Google Books. Really, the T1 was lost in the shuffle as wars raged between Amazon and Barnes and Noble in the USA.
Can Sony reclaim any of its former glory in the dedicated e-reader space, and is there really a market for them anymore? If 2011 and 2012 has been any indication, the real money is in tablet computers and most companies are pushing more volume sales with multimedia devices than a pure e-reader. Of course, there will always be a market for a pure e-ink device that is easy on the eyes, but the average customer has now gravitated towards the Nook Tablet and Kindle Fire.
Sony has made no official announcements regarding a new e-reader and things are very quiet on the FCC front. It is disconcerting to see a new device become irrelevant in the marketplace as quickly as the T1.
Michael Kozlowski is the Editor in Chief of Good e-Reader. He has been writing about audiobooks and e-readers for the past ten years. His articles have been picked up by major and local news sources and websites such as the CNET, Engadget, Huffington Post and Verge.