Sony CEO’s Candid Interview

Sony’s CEO, Sir Howard Stringer, recently gave an interview where he spoke openly and candidly about his company. The topics discussed included competitors Apple and Nintendo as well as the ongoing format war between HD DVD and Blu-ray Disc.

It’s no secret that Sony is experiencing troubles in industries that it once dominated. Stringer speaks the truth in his comments, which often point out these problems. It is intriguing to examine what he said.

On Apple

“I would never sit up here and say I’m not worried about Steve Jobs. I wouldn’t bet against Steve.”

He’s wise to recognize the threat posed by Apple. Steve Jobs’ creative vision led to the development of the iPod, which quickly supplanted Sony’s Walkman. As Apple moves further into Sony’s territory with Apple TV and iPhone, Stringer is right to be worried.

On iPod

“In 1997 we were working with IBM on electronic music distribution and could have put this out five years earlier [than iPod]. But we couldn’t get our people to understand software.”

Hindsight being 20/20, this must really bother Sony. Yet it’s remarkable that 10 years later, their people still don’t understand software. The secret behind the iPod + iTunes sensation is iTunes, the application installed on a Mac or PC. Sony has yet to develop a first-class desktop application that integrates with their devices.

On iPhone

“The good news is that Steve Jobs spotted a trend that we’ve seen. The phone is a convergence device, between music and a phone. We are all building variations on the same theme. We have sold plenty of Walkman phones [from Sony Ericsson], especially in Europe.”

With all the hype behind the iPhone, it won’t be surprising to watch it turn into a runaway success. Here again, it is the software that is key. iPhone will integrate seamlessly with applications such as iTunes, iChat, and iSync. Hooking any other mobile phone up to a computer is an abysmal experience.

On Nintendo

“Wii is a wonderful device, but has a different target audience. If we fail, it is because we positioned PS3 as the Mercedes of the video game field. PS3 is after a different audience and it can be whatever it wants — a home server, game device, even a computer.”

Sony’s PlayStation division has been dominant in the gaming industry. PlayStation 2 is the undisputed champion of the last generation of consoles. However, its successor, the PlayStation 3, is off to a slow start behind Microsoft’s Xbox 360 and Nintendo’s Wii. With Wii costing a paltry $250 compared to PS3’s price tag of $600, it’s clear why sales lag and supply sits on store shelves.

On HD DVD

“We are selling 3-to-1 vs. them. We have exclusives with Disney, Fox, Sony [and Lion's Gate] and they have the top 15 of 20 movies at the moment. At some point Blu-ray will take over based on … this support.”

There is grandstanding on both sides of the issue, as this format war is far from over. But Sony’s track record in this area is lackluster. Their list of failed formats is long: Betamax, SACD, MiniDisc, UMD, and Memory Stick, among others.

I was once an ardent supporter of Sony. Many of the computers and electronics I once owned carried their brand. Now, however, my allegiances have switched to Apple and Nintendo, two companies that develop innovative and enjoyable products.

While I’m glad to see that Sony recognizes their challenges, it remains unclear whether they can rise to meet them.

Comments

Lonna Hanson
says:
March 20, 2007 at 2:12 PM

I really enjoyed reading your entry, Jared. I can also remember when Sony was your preferred choice when purchasing equipment. The technology world is a “tough” business world. You helped me to understand it.
Mom

dh
says:
March 20, 2007 at 6:49 PM

Your critique is very persuasive. Sony needs to take note.

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