Sony had a real bad year, so it shouldn't be a surprise that the company appears in this ranking in one way or another. In fact, there was so much wrong with Sony products this year that we chose to list the company instead of a single product.
Starting with the rootkit disaster that spilled over from 2005 into 2006, Sony had an unusually consistent run of bad luck in the past twelve months:
- Nintendo DS outsells Playstation Portable by about 30%
- Roadmap for professional Blu-ray format PDD canceled
- Mylo handheld communicator launched with flaws
- U.S. Movie studios eliminate UMD offerings
- 9.6 million notebook batteries recalled
- Playstation 3 launch allocation reduced by 75%
Depending on your preference, you could write an essay about every single item on this list. Let me just take two for a quick explanation why Sony ended up at #1.
The Playstation 3 and Blu-ray were the most visible developments and roll-outs for Sony in 2006. And both somewhat stumbled into the market, while competing technologies conquered new grounds. In terms of Blu-ray, the format was announced on June 25 and introduced with just one player, the Samsung BD-P1000. The device was the only available Blu-ray player for several months, was twice as expensive as the HD DVD competition, but had the unique feature of supporting 1080p high-def video. Sony delayed its own Blu-ray player multiple times and started selling the device not until early December.
While its is still to early to make the call which of the two high-definition formats will win, HD DVD has won the first round and, at least at this time, is the more attractive high-definition format of the two.
It is ironic that Sony wanted to use the Playstation 3 game console as the product that drives Blu-ray quickly into the consumer market. However, production problems with blue-laser diodes forced Sony to reduce the launch volume of the delayed PS3 from 2 million to an estimated 300,000 units. And even the reduced volume was apparently enough to dry up the supply of blue laser diodes, which apparently made it impossible for Sony to launch its own family room Blu-ray player.
Tentcity outside a Chicago Best Buy store on the night before the PS3 launch
The launch of the PS3 was a huge disappointment in itself. The fact that we now know that some older Playstation games are not supported by the PS3, the fact that the console needs a firmware update right out of the box are just two indications that the device was rushed out. From the consumer's view, that is simply unacceptable.
The same goes for the launch allocation cut. Sony spent quite some time to hype the console and create a huge demand, only to tell its customers that only one fourth of the originally planned launch volume would be made available at launch (actually it was much less than that on launch day.) While the U.S. received an estimated 200,000 consoles, Taiwan, for example got a total of 500.
You can't tell me that Sony wasn't aware of the dramatic discrepancy between supply and demand. Whatever reason may have convinced the company to launch an unfinished product that was not available in sufficient numbers, the customer's needs were irrelevant. But then, Sony has a history of forgetting, or, at least, not understanding the costumer: At the 2006 CES, chief executive officer Sir Howard Stringer compared the relationship between Sony and its customers with a marriage: "Sometimes we misunderstand each other, but that's a concept of marriage."
Stringer promised that Sony is "learning" and 2006 showed that the company has still a lot of work to do.