Sony Security Restructures / Cuts

Sony Security's challenges continue.

Last year, Sony terminated their US GM, now they have cut employees and restructured their security systems group.

Inside, we look at the impact of these changes and provide feedback directly from Sony.

Sony Restructure / Cuts

Here is what Sony management has to say:

"Of course, Sony is constantly evaluating its operations, to maintain competitiveness and focus on growth in key business markets, and that includes security and surveillance systems. We have made some recent restructuring and personnel changes in our security systems group, but Sony remains active in this market and committed to our security customers, which will be clear from our exhibit and new technology introductions at ISC West next month."

Our understanding, though not from Sony management directly, is that they have significantly reduced the total number of sales employees following a challenging year of not making their numbers (which was a key reason for their GM termination last year).

Sony's Bigger Challenges

Though we do not know how 'good' or 'bad' Sony's sales team was, it is undeniable that Sony's bigger challenges remain on the product side.

They largely wasted 2014 trumpeting 4K products they did not have to sell, a tactic that hurts the sales team and is effectively demand generation for their competitors who do have 4K cameras. Nonetheless, as Sony alludes to in their statement to IPVM above, they will announce new products at ISC West 2015, which we would expect to include actual Sony 4K IP cameras. However, given integrator buying interests, we expect uptake of 4K across the board to be disappointing / limited.

Beyond that, Sony, like other high-end manufacturers such as Axis, are challenged by the maturation of IP / HD cameras, and the incursion of much lower cost entrants with far improved quality.

Sony, of course, historically has won on superior image quality and Sony cameras still test very well on image quality (see: Testing Sony's 6th Gen IP Cameras). The problem is other manufacturers are closing the gap faster than Sony can increase it. One example is true WDR, which a few years ago was quite limited and now is offered by almost every manufacturer even in fairly low-cost models.

To that end, we see Sony suffering from more of a strategic product / positioning challenge. Restructuring sales might help somewhat but ultimately Sony needs to find a way to establish clear differentiation against increasingly stronger rivals.