Sony is competing:

[SeaKing]

Sony is competing. Joining the Brave New World, lowering prices.


"Sony slashes Tablet S price, signaling trend

Sony has knocked $100 off the price of its S series tablet, another sign that non-Apple tablet pricing is trending downward.
The 16GB Tablet S is now $400, reduced from $500, while the 32GB model got cut to $500 from $600.
Specs include a 9.4-inch 1280x800 display, front and rear cameras, Android Honeycomb, 1GB system memory, and eight hours of rated battery life."
continued below:

http://news.cnet.com/8301-13924_3-57...?tag=cnetRiver

[charmian]

They kind of "had" to do this, now that Tegra3 tablets with superior specs are coming out at the same price.

[sabredog]

Good for those who get that benefit. Meanwhile in Australia, we pay full original price with no plans to drop prices. Oh, you can keep paying $180 for the PRS-T1 as well, 'cause we love to price gouge you!

http://www.watoday.com.au/digital-li...103-1pj5r.html

[HarryT]

Originally Posted by sabredog

Good for those who get that benefit. Meanwhile in Australia, we pay full original price with no plans to drop prices. Oh, you can keep paying $180 for the PRS-T1 as well, 'cause we love to price gouge you!

http://www.watoday.com.au/digital-li...103-1pj5r.html

This is not something that's unique to Australia - Sony's prices are high everywhere outside the US. In the UK, for example, the T1 costs £139, which is $217. This price does of course include UK VAT @20%.

[RainingLemur]

When they slash the price of the P model, then I'll be excited.

[fjtorres]

This issue keeps coming up.
Yes, it sucks when a desirable product is not available to you or it costs more than in other markets.
But it is also true that each country sets its own competitive environment based onn local laws, wages, real estate prices, and competition rules.
Focusing solely on currency exchange rates to compare prices across markets simply leads to heartburn and offers no insight into the root causes of the pricing differential.

When it comes to ebook readers and tablets the US is, at this point in time, a highly competitive *high volume* market with several players and high visibility products competing primarily on price.
On the eink side, B&N is being particularly aggressive on pricing, significantly more than eee-vile Amazon. Amazon, being top-dog, volume-wise, seems comfortable with their two-tier pricing model and are under no great pressure to match B&N's moves. Sony and Kobo, having tied their fate to epub, don't have quite as much leeway. They *have* to match Nook pricing in the US.
Outside the US, there is no Nook to drive down epub reader prices and it is up to Kobo to be the low-cost bidder. To the extent that some people refuse to consider Kindle as a reader option (be it epub religion, economic nationalism, or whatever) they relieve Sony and the other epub players from having to sacrifice margin for market share. And this is without bringing in cost-of-doing-business issues or purchasing-power parity differentials.

For tablets, the US again is a "special" case.
For starters, the content side of the tablet equation is more abundant with the likes of Hulu, Netflix, iTunes, Prime, etc making Tablet purchases more attractive and increasing overall volume.
Then you have the two-way squeeze where Apple is sucking the air out of the high-end tablet market and the Amazon-B&N war is capturing the bulk of the low/mid-range market.
Finally, you have an excess of product from the generic Android vendors (Toshiba, Asus, Acer, etc) whose attempt to compete with Apple has left them sitting on entire warehouses of unsold product that has been moving only when deeply discounted. Just in the past few weeks we have seen Toshibas and other "name" 10in tablets selling in the $300-350 range.
Just as Sony dropping the T1 to $99 was the only move they left had if they intended to be relevant in that segment, so is dropping the Tablet S to $399 pretty much mandatory if they intend to seriously compete.
Now, I'm not that familiar with the aussie tablet market, but I'm pretty sure there is no local equivalent to the FIRE/Nook low-end contest, and I'm fairly sure no vendor is racking up sales by the million as FIRE and iPad did last month. Last I looked, the NYC metro area alone has about as much population as australia. Put another way, if you add up US iPad, Kindle, and Nook sales for december alone, it adds up to half the entire australian population. Volume matters as a way to distribute fixed costs, if nothing else.

I wouldn't be so sure Sony is intentionally gouging anybody.
As a company they operate under a premium pricing model that people will be willing to pay a hefty premium for the "SONY" name stenciled on the hardware. But nothing kills brand equity faster than demonstrable price gouging.
And Sony brand equity is frayed enough that they can't afford a reputation for gaugging any more than they can afford *not* to drop prices in the US.
They're just caught between two fires.
And the global economic system is simply way too dependent on the American consumer, which in the long run is good for nobody.
Then you have a
You have Nook and Nook color and FIRE sucking a lot of the air

[HarryT]

Originally Posted by fjtorres

This issue keeps coming up.
Yes, it sucks when a desirable product is not available to you or it costs more than in other markets.
But it is also true that each country sets its own competitive environment based onn local laws, wages, real estate prices, and competition rules.
Focusing solely on currency exchange rates to compare prices across markets simply leads to heartburn and offers no insight into the root causes of the pricing differential.

Not all companies do this, however. Eg, Amazon have extremely equitable pricing; the Kindle costs, in other countries, pretty much a direct conversion of the US price plus the relevant local taxes. Sony certainly leave one with a certain impression that high prices in other countries are perhaps being used to subsidize the price in the US market.

[johnnyb]

On the contrary, it appears that Sony will remain a dumb yesterday company until they go down.
Had they started slashing prices in other markets than the US, where the stand with their back against the wall, they could for once dominate a market and be ahead of the competition making them adjust. But they are too heavily reliant on yesterday's retail strategies and probably still believe that you'd go to a store and buy the Sony thing because it's so premium... What they forget is that they haven't been inventing anything new in decades...

[HarryT]

Originally Posted by johnnyb

What they forget is that they haven't been inventing anything new in decades...

Sony invented the eInk book reader, if nothing else. That's pretty significant, from the point of view of this site, is it not?

[johnnyb]

Originally Posted by HarryT

Not all companies do this, however. Eg, Amazon have extremely equitable pricing; the Kindle costs, in other countries, pretty much a direct conversion of the US price plus the relevant local taxes. Sony certainly leave one with a certain impression that high prices in other countries are perhaps being used to subsidize the price in the US market.

this is unfortunately true and this is the impression that many people now have of Sony...

[johnnyb]

Originally Posted by HarryT

Sony invented the eInk book reader, if nothing else. That's pretty significant, from the point of view of this site, is it not?

I'm not sure if they REALLY did but prbly made it into the form that it is today...
Yet, they haven't invented selling it...

[HarryT]

Originally Posted by johnnyb

I'm not sure if they REALLY did but prbly made it into the form that it is today...

They did invent it. The Sony Librie was the world's first eInk bookreader (sold only in Japan). The PRS-500 was the first to be sold in the US.

[fjtorres]

Originally Posted by HarryT

Not all companies do this, however. Eg, Amazon have extremely equitable pricing; the Kindle costs, in other countries, pretty much a direct conversion of the US price plus the relevant local taxes. Sony certainly leave one with a certain impression that high prices in other countries are perhaps being used to subsidize the price in the US market.

Or perhaps Amazon uses it US revenues to subsidize its foreign prices?
(They're eee-vile, after all.)

Do consider Amazon is primarily in the content business, not the hardware business. And they run the Kindle hardware business on a global basis, unlike their ebook business. To them a US Kindle sale is bookkept at the same price as a non-US sale. They obviously arent expecting the Kindles to carry any local overhead.

I agree that Sony does labor under the impression that their non-US prices are higher, but Sony seems to expect their various regional units to be independently profitable. So if their european costs are higher, they have no choice but to pass them on to the consumer. (And they don't have anywhere near the content revenues that Amazon has.)
I've long thought Son'y biggest mistake in the ebook business was getting epub religion and dropping lrf.

edit: Hmm, I'm thinking Amazon's Kindle pricing is very probably the result of treating Kindles as just another product: they buy them at a fixed price from the supplier, add a standard markup, and that is the selling price. By not treating it as a part of their business, its price ends up independent of local operating costs and can thus directly track currency rates. This is not an option for Sony.
(Amazon's IT is "free" to their storefronts because it is a profit center in its own right, due to their B2B product lines. And Bezos has in fact said they expect Kindles and the ebookstore to be independently self-financing.)

[HarryT]

Originally Posted by fjtorres

I agree that Sony does labor under the impression that their non-US prices are higher, but Sony seems to expect their various regional units to be independently profitable. So if their european costs are higher, they have no choice but to pass them on to the consumer. (And they don't have anywhere near the content revenues that Amazon has.)

Certainly one significant difference is that Sony have a large retail presence, and operating a retail business is MUCH more expensive in Europe than in the US. Higher wages costs, higher property and business taxes, etc.

[fjtorres]

Originally Posted by HarryT

They did invent it. The Sony Librie was the world's first eInk bookreader (sold only in Japan). The PRS-500 was the first to be sold in the US.

Correct.
They also were the first to apply the walled-garden business model to ebooks.
Then they abandoned it.
They've never recovered.

There are several cautionary economics textbooks to be written off Sony's business decisions in the last 20 years, just on TVs, Gaming, and ebooks, never mind phones and semiconductors.
Very dysfunctional company.