Sony Corporation is a global leader in consumer electronics, gaming, entertainment, and other businesses. The company invests heavily in research and development (R&D) to create innovative products and services that meet the needs and expectations of its customers. In this article, we will examine how Sony’s R&D spending compares to its competitors, such as Apple and Microsoft, and the benefits and challenges of its R&D strategy.
Sony’s R&D Spending as a Percentage of Revenue
One way to measure a company’s R&D intensity is to look at its R&D spending as a percentage of its revenue. This ratio indicates how much a company invests in R&D relative to its sales. A higher ratio may suggest that a company is more focused on innovation and long-term growth, while a lower ratio may indicate that a company is more efficient or conservative in its R&D spending.
According to Statista, Sony’s R&D spending as a percentage of its revenue was 8.3% in the fiscal year 2021, which ended on March 31, 2021. This was slightly higher than the previous year’s ratio of 8.1% but lower than the company’s peak ratio of 9.6% in the fiscal year 2012. Sony’s R&D spending as a percentage of its revenue has been declining steadily since then, as the company has been restructuring its businesses and improving its profitability.
In comparison, Apple’s R&D spending as a percentage of its revenue was 6.3% in the fiscal year 2020, which ended on September 26, 2020. This was slightly lower than the previous year’s ratio of 6.5% but higher than the company’s average ratio of 4.7% over the past decade. Apple’s R&D spending as a percentage of its revenue has been increasing gradually since the fiscal year 2013, as the company has been expanding its product portfolio and entering new markets.
Microsoft’s R&D spending as a percentage of its revenue was 13.4% in the fiscal year 2020, which ended on June 30, 2020. This was slightly higher than the previous year’s ratio of 13.2% but lower than the company’s peak ratio of 17.4% in the fiscal year 2009. Microsoft’s R&D spending as a percentage of its revenue has fluctuated between 13% and 15% over the past decade as the company has been balancing its investments in cloud computing, artificial intelligence, gaming, and other areas.
The table below summarizes the R&D spending as a percentage of revenue for Sony, Apple, and Microsoft over the past five fiscal years.
| Company | FY 2016 | FY 2017 | FY 2018 | FY 2019 | FY 2020 |
| Sony | 7.8% | 7.9% | 8.2% | 8.1% | 8/3% |
| Apple | 4.7% | 5.1% | 5.3% | 6.5% | 6.3% |
| Microsoft | 14.5% | 13.5% | 13.8% | 13.2% | 13.4% |
Sony’s R&D Spending per Product
Another way to measure a company’s R&D intensity is to examine its R&D spending per product. This metric indicates how much a company invests in R&D for each physical product it sells (excluding software and services). A higher metric may suggest that a company is more innovative or differentiated in its product offerings, while a lower metric may indicate that a company is more mass-market or commoditized in its product strategy.
According to Gizmodo, Sony’s R&D spending per product was about $11.5 million in the fiscal year 2009, based on an estimated number of 65 physical products sold that year (excluding software and services). This was much lower than Apple’s R&D spending per product of about $78.5 million, based on an estimated number of eight physical products sold by the company that year (excluding software and services). Microsoft’s R&D spending per product was not available for comparison.
However, these numbers may not be accurate or meaningful, as they are based on rough estimates of the number of products sold by each company, which may vary depending on how one defines and counts a product. Moreover, these numbers do not account for each product’s quality, complexity, or profitability.
Sony’s R&D strategy has several benefits and challenges, as outlined below:
Benefits:
- Innovation: Sony’s R&D investments have led to the development of several groundbreaking products and technologies, such as the Walkman, PlayStation, and Bravia TV. These products have generated significant revenue for the company and established Sony as a leading brand in various industries.
- Differentiation: Sony’s R&D investments have enabled the company to differentiate its products from those of its competitors by offering unique features, designs, and user experiences. This has helped Sony to maintain customer loyalty and market share in highly competitive markets.
- Synergy: Sony’s R&D investments have also facilitated the sharing of knowledge, skills, and resources across its various business units, such as electronics, gaming, entertainment, and financial services. This has allowed Sony to leverage its strengths and capabilities in multiple areas and create integrated solutions for its customers.
Challenges:
- Cost: Sony’s R&D investments require significant financial resources, which may pressure the company’s profitability, especially during periods of economic uncertainty or intense competition. Sony may need to balance its R&D spending with other strategic priorities, such as cost-cutting, restructuring, or divestment.
- Timing: Sony’s R&D investments may not always result in successful products or technologies, as the development cycle can be long, complex, and uncertain. Sony may need to accurately anticipate market trends, customer needs, and technological advancements and allocate its R&D resources to minimize the risk of failure.
- Integration: Sony’s R&D investments may also face challenges in effectively integrating its different business units, cultures, and technologies. Sony may need to foster a collaborative, open-minded culture that encourages cross-functional communication, experimentation, and learning.