Sony seeks slimmer, brighter future

[Christopher]

The Times (uk) has a nice article on the upcoming Sony restructuring plan that will be unveiled on Thursday (9/22). The plan is a brainchild of Sir Howard Stringer, the first non-Japanese CEO/Chairman to take the helm at Sony -- this presentation will heavily influence the future of ATRAC and other Sony music devices. Stay tuned to ATRACLife as we will keep you strictly informed on what's important to the future of our obsession.

The fate of Sony, the electronics and entertainment giant, will be revealed this week as Sir Howard Stringer, its chief executive, embarks on a “make or break” cost-cutting drive aimed at resurrecting Japan’s most iconic company.

The long-awaited unveiling of the group’s strategy, due on Thursday, is also likely to include bold visions of the future: Sony is expected to outline a “next generation” of digital devices and declare a full-scale technology war with Apple’s iPod, Microsoft’s Xbox 360 games console and Toshiba’s next generation of DVD players.

Sir Howard has made clear that his reform package would be aimed at restoring the core electronics business — still representing 65 per cent of the group, despite a dire three years of performance — to its former glory.

Observers predict a dramatic retreat from many underperforming product lines and a channelling of resources into any gadget or appliance that can exploit Sony’s powerful “cell” chip.

Yohei Kanazawa, an analyst with Nikko Citigroup, said: “We expect the company to narrow the focus of both its product line-up and its R&D (research and development) activities. It has already said it will close down its cathode ray tube (televison) facilities in the UK, but further restructuring is possible.”

Some observers believe that Thursday’s announcement will see the company definitively lose its “Japaneseness” as it ditches businesses such as robotics, for which it has long had emotional attachments.

Although the restructuring plan is expected to focus primarily on a huge reduction of group overheads, Sir Howard’s measures will probably not involve such big job cuts as previous restructuring schemes.

Instead, analysts say, the Welsh-born former studio mogul will concentrate on long-overdue corporate reform: shedding non-core assets and reducing the overall number of Sony operating companies from the current five to three.

Sony Communications, the group’s thriving internet and music download business, is viewed by investors as a prime candidate for being crammed with a variety of extraneous operations from around the group and then listed as an entirely separate company.

Sony Entertainment, the mainly United States-based music and film operation, is another possible candidate for a separate listing. First, however, it is expected to unravel some of the joint ventures that it has a stake in by buying out its various partners.

Sony Computer Entertainment — the division that controls the PlayStation console and hand-held games machines — is expected to stay close to the core of the group.

Fumio Osanai, an analyst with UBS, said: “We (also) anticipate the listing of the financial business, as well as Sony BMG in the medium term, and extensive efforts to reduce fixed costs. Thereafter, we expect management focus to turn to rebuilding the electronic devices business.”

While the focus of the announcement on Thursday will be the nuts-and-bolts of restructuring, no Sony meeting would be complete without some word on forthcoming products. The company will not have much more to say about the forthcoming PlayStation 3 console, which was the star attraction of the Tokyo Game Show last week, but will probably unveil the Christmas line-up for its network Walkman range of “iPod-killer” portable music machines.

Analysts believe that Sir Howard may discuss the group’s plans for “Location Free television” — a cutting-edge technology that would allow live internet streaming of television directly to mobile phones and other hand-held devices.

Of course, we've already covered what Sony is going to release -- but expect a wealth of new information to fill in the gaps. More units may be announced, as well.

[MizuRyuu]

it would be nice if they announce a new model of Sony Vaio Pocket.... but then, i did just buy one from ebay.....

[Dimitri]

I would be very surprised to see another Vaio pocket model. I would think Sony considered that a failure. The units only really sold well when they were priced below $300, and you can bet Sony was taking a loss at that price! Plus the confusion created by having a non-walkman music player was probably considered a mistake. It's a shame, though.

[iyareu]

The press release :

http://www.sony.net/SonyInfo/News/Press/20...050E/index.html

As with most documents like these, they speak at such a high level it is hard to get any idea of detail.

Some of the things that I thought were pertinent. (Remember these are my views - not necessarily what Sony meant)

1. As a key part of this initiative, we are significantly reorganizing our electronics group to place centralized decision-making authority over key areas under the Electronics CEO. This substantial change abolishes the company system and assures coordination and focus across newly defined business groups. Rigorous horizontal coordination in key areas-product planning, technology, procurement, manufacturing, and sales & marketing-will allow rapid and streamlined decision making across product lines. This will also permit uniform software development that will assure seamless interoperability between our products, eliminate design and product redundancies, and assure decisive and rational R&D planning and spending.

Restructuring to reduce duplication and increase interoperability.

This s a good thing.

Why do we have a VAIO pocket when there is a perfectly good walkman brand.

There is no point.

It should have been the WALKMAN Pocket rather than the VAIO.

If they had had more joined up thinking it would have been so and then could have been updated INSIDE the walkman brand but instead it is discontinued.

2. In electronics, televisions, digital imaging, DVD recorders and portable audio will be our focus areas, and we will work to establish leading positions in each market. This will be in tandem with our efforts to strengthen semiconductor and key component device businesses as an engine of differentiation.

A commitment that they want to take a lead in the portable audio sector. This is a real commitment to dealing with ipod and responding to CUSTOMERS.

I am pleased they have said they want to do this but I really want to see some action.

Releasing the A series of HDD players does not seem to be congruent with the comments made as they have no chance of improving Sony's place in the HDD MP3 market.

The rest is interesting but these were the stand outs for me after a first reading.