Sony Hangs Up On Residential Phone Market

By Greg Scoblete -- TWICE, 8/6/2001

Park Ridge, N.J. - Citing steep price erosion and a redirection of focus, Sony announced that it is withdrawing from the home phone market to concentrate instead on home networking products.

"The future of the residential telephone market is such that we couldn't justify the cost anymore in investment and engineering," said Phil Petescia, vice president, Audio/Video Accessories and Telecom Products.

From Sony's perspective, the market and its products were decidedly "retro" and it has decided instead to shift its Tokyo engineers from home phones to home networks where the internal need was greater, according to Petescia.

"When you look at the core engineering strengths in the wireless transmission of data, it made more sense to shift our engineers to a market with a future, rather than keep them in this declining business," Petescia said.

Despite success with its 2.4GHz line and with cordless phones in general, Petescia claimed that telecom had not been a strong category for the company for the last several years. Price erosion, as deep as 15 to 25 percent reductions each year, on residential phone products forced Sony's hand.

Petescia noted that all of Sony's retailers had been informed of the move and that the company was in close contact with its various channels to ensure product fulfillment through the holiday season, though there will be no new product introductions.

"By the end of the calendar year we will be out completely," said Petescia. "However we'll still have production and be filling orders through Christmas."