Poor Sony. They just can't kill the Walkman. It's hard to believe that the Walkman is still a high-profit product in Sony's portfolio, but continued consumer need, however small, seems to be strong enough to keep Sony's production moving forward.
I don't have the exact production numbers, or, to be honest, the profit margins, but we can assume they aren't huge. (This is especially true when compared to Sony's line of CD players and other higher-end equipment.) So why continue to do it? If you're answer is "Well, there's a market for it, so why stop making them", then you're answer doesn't quite match up to the reality.
As the CEO of Puryear IT, one of the most important decisions I make, whether a tactical, day-to-day decision, or a long-term strategic move, often boils down to this simple question "If I have two units of work available to me, and I can put those two units here or there, which is the better choice?" In other words, business is all about opportunity cost. I have to give up potential profit in one area to make it in another.
Sony is making the exact same decision here.
They choose to continue production of the Sony Walkman, which requires some defined set of work units and money. If they're margins are only 8% on the Walkman, but 12% on another product, then from a numbers standpoint the decision is bad. But from a branding and market loyalty viewpoint? The price they are paying, the lost 4% of profit on their investment, may be rather cheap.
Microsoft, and other OS and application vendors, makes this decision all the time. How often do you find a tool, widget, or rarely used "feature" in Windows that NEVER SEEMS TO GO AWAY? Well, you found Microsoft's Walkman.
Let's consider two obvious examples:
* The Windows OS exposes internal calls for use by external programs. (Take a look at this old but still valid post on the topic for an interesting example.)
* Windows XP's "Switch to Classic View" in the Control Panel.
The second example is what will hit home to most readers because most of you are, well, geeks and you almost definitely PREFER the "Classic View". And that's the point. You prefer the old way of doing it, even if the new format better organizes the Control Panel and its functions.
So, are you still using your Walkman?
P.S. Yes, I'm a geek too, or at least I hope I am.
This story, "Why the Sony Walkman is Another Microsoft Windows" was originally published by Network World.