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Must-Read New Yorker Profile on Sony’s Stringer – Few Good Signs May 31, 2006

Posted by David Card in Digital Home & Personal Tech.
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Colleague Joe Laszlo and I came away with similar feelings after reading the New Yorker’s profile of Sony CEO Sir Howard Stringer last night. (To read the article, fellow onliners, you’ll actually have to “purchase” a “copy” of the magazine at your local “newsstand.”)

Our sad takeaway: according to this story, Sony is doomed in deep water and Stringer knows it, but he’s practically helpless to do anything about it. One hopes Stringer was just holding back his cards.

– Author Mark Singer theorizes that Sony’s struggling because it can’t connect its silos, and there are no real signs that Stringer can correct that. Well, connecting devices, content, and core technologies has only really ever worked once, for Playstation, but it worked oh, so well. It is not a very repeatable model. Individual Sony products and business units must succeed in their own rights. But there’s not much sign of that, either.

– Singer spends some time on Stringer’s theories on promoting a handful of “champion products,” and cutting slackers. But Stringer isn’t cutting anything. Aibo? Come on. And other than Bravia TVs, where are the champs?

– While Singer said movies weren’t key to a Sony turnaround, he spent nearly as much time talking with Stringer about them as he did about Playstation. In recent years, Playstation accounts for only 10% to 13% of Sony’s revenues, but 38% to 69% of its operating income. If there’s a better definition of champion product, and one that’s under as serious a threat as the Walkman franchise, I’m not aware of it.

– Sony needs to fix consumer electronics, and Bravia is doing well. Singer and Stringer both seem to think that home-grown core technologies are the key to fixing CE. (Not that Samsung has any. Samsung is the Sony analog, not Apple.) But, while he played down the struggling Blu-ray optical storage technology, Singer seems to have fallen for Stringer’s “Cell” chip pitch. One has to ask, then, if the Cell is critical to integrating the silos and creating cool products, why is it in nothing but Playstation? Why isn’t it in TV sets or cameras or phones? Because there’s almost no advantage to an expensive, overpowered, cross-platform microprocessor without cross-platfrom software. And not only can’t Sony do software, there’s no compelling need for common software on cameras, phones, TVs, and videogame consoles. Common DRM? Pipedream — ask Microsoft. Common UI? Ditto. Authoring tools? Nope. Content compatibility? Sure, but that’s not a chip/OS/app issue.

– Quoting: When Michael Eisner, the former emperor of Disney and nouveau talk-show host, interviewed Stringer, not long ago, he asked, “How do you compete against the iPod? Do you make a better technology or do you make a better commercial?” Stringer responded with a rueful smile and said, “That’s very clever.”

Uh, no, that’s not clever. It’s a damn good question. What’s the answer, Sony?

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