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How did Sony—the company that revolutionized portable music with the Walkman—lose its market dominance to Apple, a computer company with no prior experience in the music industry? In this episode, I examine how fear transformed Sony's innovative culture into siloed kingdoms that sabotaged their own digital music future.

Timeline:

· 1979: Sony launches the Walkman, selling over 100 million units worldwide

· 1999: Sony engineers develop a working prototype for a digital music player (2 years before iPod)

· 2000: Internal meeting where divisions clash over the digital music player

· 2001: Apple releases the iPod with "1000 songs in your pocket"

· 2003: Apple launches iTunes Music Store

· 2007: Sony's Connect Music Store shuts down

· 2007: Apple launches iPhone, effectively cannibalizing its own iPod

Key Points:

· Sony had all the necessary resources to dominate digital music: engineering talent, brand recognition, music catalog, and global distribution

· Internal fear of cannibalizing CD sales led to crippling restrictions on their digital music player

· Sony's insistence on proprietary ATRAC format instead of supporting MP3s limited their appeal

· How Sony's music division sabotaged their electronics division's innovations with excessive DRM

· Between 2000-2008, Sony's innovation proposals dropped by 83%

· Steve Jobs' philosophy: "If you don't cannibalize yourself, someone else will"

Quotes:

· "While Sony battled internally, Steve Jobs stood up on a stage and introduced the sleek and simple-to-use iPod."

· "We spent more time discussing what users couldn't do than what they could do." - Former Sony Connect Manager

· "We had the technology, the expertise, and the brand. What we didn't have was the courage to disrupt ourselves." - Sony Engineer

Further Reading:

· Visit fear-incorporated.com for more case studies and resources

· Howard Stringer's "Sony United" initiative (2006)

· Sony's 2009 major reorganization to break down silos

Connect with Taras:

• Website: fear-incorporated.com

· LinkedIn: taraswayner

· Instagram: @fear_incorporated

· Email: [email protected]