Sony and Bosch Combine Forces

Author: Brian Karas, Published on Nov 15, 2016

Two of the biggest brands in the video surveillance industry are joining forces.

Following a wave of industry consolidation and the race to the bottom, Sony and Bosch are partnering together. Neither company is acquiring the other, but the impact may be the same in many ways due to their combinations on both the sales and product development side.

In this note, we share details from a conversation with Bosch and Sony executives on how this will work plus examine the market impact.

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Comments (43)

Unfortunately 99% percent of customers don't want to pay for Fort Knox security technology, we can't compete with the quality low cost cameras.

The fact remains - Sony have stagnated their range for approx 18 months. The prices have only gone up and they still retail 720p at almost 4 times the cost of the lower brands. People will pay for a premium but not that much and its hard to justify a huge increase in price for a huge lack of pixels. The range is limited by internal mini dome cameras and external PTZ's with no IR. The R and D have focused entirely on very high end low light products and therefore they have lost the lower end. It seems Sony have lost their way. I don't know too much about Bosch but from the outside they seem to have similar strategies. Such a shame to see it go this way.

Sony have stagnated their range for approx 18 months.

I agree. This deal was probably in the works for most of that time, so that could be one factor.

But, to your point, they overall product portfolio is behind and they were clear to us that this move is not going to address the low end (which is most of the market given how good $100 cameras have become today).

I have two clients that still do pay $600+ per unit for 720p Sony indoor non-IR non-vandal domes. I tried my best to talk them out of it, but they are locked in with their POS provider. That provider integrates a VMS into their POS system. They will only allow Sony cameras that they sell and pre-configure to hit the network.

One of these clients has hundreds of locations. The other is a start up with two. Huge differences in scale.

Jon -

Do you know who the POS company is?

https://www.foodtecsolutions.com/

Been thinking more Sony moving to Bosch seems like a soft exit from the market with a passover of technology and products to Bosch - designed not to rattle Sony shareholders. Seems a lot like Axis taking over Canons range..

Well it will come down to if Bosch can deliver on their end, Sony Has hardware chips and imagers that make most of the rest of the market look like cheap imitations. but dont really "care" about putting together a security solution because like Samsung they make their money in other markets.

the problem is other companies like Samsung have hurt Sony's market shares in those areas so for them if Bosch can take Sony's hardware and make high quality Security equipment and sell the hell out of it Sony can make some more money to make up for losses in other areas.

Best deal for the both of them is if Sony gives Bosch hardware at cost Bosch makes 1080P cameras with more functions than an algebra book ( low end $250-400) and 4K cameras Standard ($500 - 800) with a wide variety of extra functions in it and finally a $1000 PTZ . Question comes down to VMS platform which I dont think Bosch should worry with. they just should just focus on cameras and encoders and maybe some NVR servers. if they do this they will stomp out alot of the mid tier competition and some of the higher end cameras. they will make it ONVIF compliant I am sure, so ride that pony for VMS/PISM manufacturers to save money. they will still make a fortune at those prices if they can deliver a solid product.

Keep in mind most what they will be able to offer wont appear, regardless of what they will actually offer till late 2017.

This deal may work out for them both. To me it is just muddy. Just reading the article explaining how this deal works made my eyes cross. Imagine being a customer conducting final interviews to decide between Bosch and Sony.

I did not think anyone could obfuscate their business plan more than Canon.

As an ex-Sony and ex-Canon employee I can see both sides.

What Canon has done, putting all sales and marketing functions to Axis, makes sense to me in the short-term. There are no Canon sales people any longer muddying the waters as there will appear to be in this case. I think the Canon product will disappear at some point and it'll be as you were.

This Sony/Bosch move doesn't make any sense to me at all. It's far too convoluted and bizarre. Sony's commitment to the security market has been questioned for years and years, so perhaps this is a step to slowly backing out once and for all, retaining dignity and pride, and lining up Bosch to be the long-term candidate and and valuable customer of Sony's ISS division selling the camera blocks and components etc.

I agree with this statement. It is actually acquisition. Sony is 1/3 of Bosch and together they become N4 after Hik, Dahua, Axis. But there are not much reasons to keep Sony brand in the future, so I think that after some time Bosch will decide to eliminate it.

It is actually acquisition.

Murat, this is factually false. You are certainly entitled to your opinion about whether or not this is a good move but you are misusing the English language by calling this an 'acquisition'. Bosch has not acquired Sony's brand or IP etc.

Yes, it is not acquisition formally, but as I understand correctly, sales of Sony is now managed by Bosch. All Sony sales employees become Bosch employees which means that Sony cameras sales now become part of Bosch sales. In other words, Sony and Bosch turnover is now only Bosch turnover which usually happens after acquisition.

Another reason to call this "acquisition" is that when company reject to sell product by their own, they also reject to have any feedback from the market to correctly manage product's roadmap and product's development strategy. Moving sales to Bosch, they also move product management to Bosch. It means, that now Bosch is responsible for R&D of future Sony cameras. I just can't imagine the other way.

Murat,

Your point seems to be that in many ways it is 'like' an acquisition.

But you said:

It is actually acquisition

And, in English, this is not actually an acquisition.

In other words, Sony and Bosch turnover is now only Bosch turnover which usually happens after acquisition.

Or an OEM only strategy.

Murat, your opinion on the issues in this deal and whether it will work is welcome, but I can't allow you to state factually false things like 'it is actually acquisition'.

Sure, John, it is not acquisition of whole Sony. Sony is a huge company and I don't think that any security company can acquire Sony. But camera business is looks like acquired by Bosch. And this is just my opinion. We don't know details of the deal. May be Bosch has a lot of restrictions in managing Sony sales, but I don't think so. And again, this is just my opinion.

-Axis acquired Canon's camera business (while Canon acquired Axis);

-Hanwa acquired Samsung's camera business (and other Techwin businesses);

-Bosch acquired Sony's camera business.

All deals are formally different, but in fact one camera brand's team is now acquired the other brand's team and all sales.

It is not an acquisition of even a part of Sony.

It's a partnership contract, which means that if Sony wanted to go back to selling their own security cameras, they could end the contract. If it was an acquisition, Sony would have to negotiate and pay Bosch to re-acquire those assets.

As I said before in some ways it is 'like' an acquisition, but it is not 'actually acquisition'.

If you have some evidence that Bosch and Sony are lying that this is not an acquisition, please present immediately. Otherwise, please stop.

Ok, I agree with this...it is 'like' acquisition, not 'actually acquisition'.

If I have any details of the deal, I share of course...

It makes a lot of sense given the way the Asian markets are moving. Sony needs to keep their chip companies making money, Sony is not going to invest money in their security division so why not let Bosch invest their money in development. that way sony sells more chips, Bosch gets top of the line chips and imagers at cost or just above cost to secure their brand in the mid to upper tier so they can be competitive there.

But as I said before Bosch still has to deliver this is a make or break deal for them and Sony most likely. It going to be really awesome or really disappointing

Similar to the Canon/Axis merger.

I think we will see more of this as there are simply too many players in the market place.

Canada has over 35 camera mfg's and OEM's so with HIK and Dahua coming in from China with low prices and big marketing buckets some are going to disappear and some will merge as they see the market shrink!

Sony has a brand rep with end users, Bosch has a decent brand rep with integrators.

Sony has good cameras, Bosch has PSIM, VMS, fire panels, alarm panels and a wide product base. There is a good synergy.

The only weird part is the go-to-market strategy of Sony and Bosch sales people fighting for the same business.

But as they say more hooks in the water will catch more fish.....

Bosch + Sony = Bony

Sony + Bosch = Soch

Better branding ideas?

Fact: In one of the more notable partnerships between Japan and Germany, they united as the 'Axis' powers...

Fact: In one of the more notable partnerships between Sony, Bosch and Axis, they united as 'ONVIF'...

Better branding ideas?

SoBoCo

"SoB" will much more elegant

"SoB" will much more elegant

Interesting!

Btw, in English, 'sob' is to cry loudly or 'son of a...'

I like SOB - SonyOrBosch.

Fitting since you can't buy both from the same rep.

SoBo. Costs more than Soho.

Very little impact to our industry. Both companies lost their way a long time ago.

Unfortunately, I agree. Bosch was once just as prominent as Pelco in my region and Sony along with Axis were the first brands of IP cameras I ever sold. Bosch is almost completely absent now and Sony is rarely used.

As a major Distributor of Bosch with great success in playing in the top "tier" market place, I think its very positive as Bosch cost base will be so much lower.

This feels like a bit of a last gasp to me. Two companies that used to be pretty good, desperately clinging to each other as they sink.

Was there any mention of combined manufacturing capabilities? I saw combined design and sales, but I would think any true benefits would also need them to merge their manufacturing to be maximized fully

No, for now at least it seems that both companies will continue to manufacture their own devices independently, but the sales and fulfillment will all be done through Bosch. In a sense, Bosch is acting like a master distributor for Sony outside of Japan.

Is there any strategy that I am not seeing in regards to why companies like Axis/Canon, and now Sony/Bosch are keeping manufacturing efforts separate?

I do not think there is anything key that you are missing. In both of the scenarios you listed, these arrangements are still early/preliminary. It would not be unreasonable to expect that the Canon and Sony brands could be phased out in time, but they may not want that much disruption up front.

I think it's sad. Like others here have commented on, Sony has pretty much absent in anything new for over a year and they had a history of being late. And they're just too expensive. I never dealt with Bosch, but I get the same impression. Like Eddie said, it could be awesome, but my fear is it will be disappointing. No unified manufacturing? Reps still segregated by brand? The train is leaving the station and they seem worried about who gets the window seat and who gets the aisle seat. Seems like half-hearted commitment and half stepping. But I'm not a professional business analyst, so I could be perfectly wrong.

Update: The agreement is now finalized. Bosch notes:

We will be working under a dual branding strategy, and our dealers will continue to receive exceptional service and support from both the Bosch and Sony lines going forward.

Update: Spring pre-announcement:

In March 2017, Sony will launch eight new Full-HD (1080p) video security cameras within its sixth generation (G6) range of network cameras, meeting the ever-increasing demand for greater image clarity within the video security market. New G6 cameras’ high sensitivity capabilities ensure that the color integrity of images is maintained even in extreme lowlight situations. At the same time, Bosch is updating its portfolio concerning video analytics and bitrate management. Starting as of May 2017, all network cameras from the IP 4000 series will be equipped with built-in video analytics as a standard as well as latest bitrate management techniques combined with H.265 video encoding, reducing bitrate by up to 80 percent.

New interview with the new Bosch head of the Sony Video Security group. Notable details:

  • "As part of the distribution and marketing cooperation, we have taken on around 60 Sony employees worldwide."
  • "We are making steady progress on our developments and the first jointly developed products are expected to be launched in 2018."
  • "There will be no co-branded or dual branded products mentioning both brand names on one product."

"There will be no co-branded or dual branded products mentioning both brand names on one product."

Well, I'm not expecting to see Sony-Bosch on the data sheets anytime soon. But I am wondering when they will introduce the Bosch IPELA line. (As a hypothetical example.)

With Bosch being a "distributor" for Sony, do you think this will introduce any layer of cost before the camera reaches conventional distributors like Scansource, Anixter and CSC, that might make it harder to compete on price?

With Bosch being a "distributor" for Sony

I don't really see Boch being a distributor of Sony. A distributor typically implies that the manufacturer has its own separate sales force. For example, ADI is a distributor of Hikvision but Hikvision employs its own legion of sales people. By contrast, Bosch is now employing the previous Sony sales and support people (they literally transferred them over), so the costs are roughly the same.

That said, neither Bosch nor Sony has ever really tried to compete on price. I doubt they will start now.

You're right, I did not word that properly. Not a distributor per se, but a "distribution partner", from this quote in the article John linked....

"We are the exclusive distribution partner for Sony video security products globally, with the exception of Japan."

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