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Sony

November 22nd, 2002 · 1 Comment

Two stories on Sony in the business press. The first one is from Fortune and it looks at the new ideas and products Sony is building for the broadband future.

For the past two years, Ando and Sony’s chairman and CEO, Nobuyuki Idei, have been trying to fast-forward the company into a broadband entertainment future, one in which nearly every Sony consumer product–mobile phones, digital cameras, televisions, multimedia computers, game consoles, portable stereos, video recorders, set-top boxes, handheld PDAs, even robots–will be connected to the Internet or an Internet gateway device.

Once all these products are so joined, Sony will be able to deliver its music, movies, television, games, and data services to customers wherever they may be, in the office, at home, in the car, or wandering down the street. The customers will be able to instantly share their own digital pictures, videoclips, and text and voice messages–put another way, their ideas and emotions–at the touch of a button. Sony executives say, with a sincerity that disarms even cynical observers, that a core design criterion for all Sony products is to touch the heart.

But this new vision has wrenching implications for the $57-billion-a-year company. Before Sony can touch the hearts of customers (and reach into their wallets), it has to win their minds. That means selling the broadband vision to consumers who have been slow to embrace high-speed networks. It also means selling the vision to dealers, who may actually have to reconceive and reconfigure their stores to accommodate the new Sony products.

The second story is from the Wall Street Journal and it looks at the possibility of Ken Kutaragi emerging as the new CEO of Sony. Kutaragi is the brain behind the PlayStation.

Mr. Kutaragi would fit Sony’s pattern. Sony venerates its mavericks, a culture inspired by late co-founder Masaru Ibuka, a puckish inventor who bet the franchise on long shots that turned into hits, such as the transistor radio and the Trinitron television. A maverick is traditionally tapped to lead the company, with the expectation that he’ll shake things up. Mr. Idei, a marketing whiz, leaped more than 10 places in the executive rankings in 1995 when he was named president by Norio Ohga, who moved up from president to chairman. Mr. Ohga himself was a former opera singer whose hard-nosed ways irked colleagues but launched him to the top ranks in the early 1980s.

It was Mr. Kutaragi who pushed Sony into the risky videogame business with the original PlayStation game machine in the early 1990s. Later, he made a $2.5 billion bet on the PlayStation 2 console, a gamble that initially pummeled Sony’s profits. Along the way, he spurned a partnership with Bill Gates , insulted colleagues and once sought to settle a strategy dispute by offering to arm-wrestle a fellow executive.

But he delivers. The unit he created and now runs as president, Sony Computer Entertainment Inc., had sales of nearly $10 billion in the year ended March 31, second only to the electronics division and larger than Sony’s movie or music units. The games business posted a huge loss in 2000 but has bounced back, contributing 60% of Sony’s operating profit of 135 billion yen ($1.12 billion) in the last fiscal year.

Tags: Management

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