Sir Howard Stringer never sits still long enough to warm his chair; as the spearhead of Sony's business, he is constantly in motion in Japan, the US, Europe and elsewhere. Originally a journalist, he joined Sony Corp of Japan 11 years ago and was appointed chairman and CEO over three years ago. In April 2009 he added president to his list of titles. We spoke with him about his thoughts on Sony's future, and about Sony's course through the current unparalleled recession.
A lot of people are
saying that this is a once-in-a-century recession,
but what do you say?It is certainly the worst I've ever experienced, and I can't guess how long this tough situation might continue. The economists don't seem to have anything useful to say, because they haven't even figured out what happened to the banks. And there's the problem of the yen, so strong that it's eroding the price competitiveness of Japan's export products.
Consumer electronics companies have to lower their costs or go bankrupt. There are some people who say that you should try to get out of this crisis through innovation, but the recession has slashed revenues and profits so far that innovation alone can't work. The recession is not the only cause: products from companies in places like Korea, Taiwan and China cost less than those made in Japan. They are driving down the unit prices for products, and eroding the profitability of Japanese companies. That trend won't change in the future, either.
If a product's price changes too much, nobody will buy it, and we can't make any innovations unless our product is a big hit. There are a number of tough problems, such as cutting temporary employees and accelerating manufacturing outsourcing. However, the Sony management team - including myself - has to solve these problems.
I am far from pessimistic, though, because a crisis is also an opportunity. I feel this is a golden opportunity for Japan's electronics industry to regain its dynamism. For Sony, this means that it is now a lot easier for everyone to understand that our cost structures are too high, that we need to change with the rest of the world, as well as a few other points.
What do you think engineers should be
focusing on? Are products becoming mere commodities?Well, I think it is a lot harder to come up with a brand new product concept, like the Walkman, these days. Televisions, for example, offer more vivid colors than ever before, and you can hang them on the wall now, but you have to wonder just how much further they can evolve through that kind of hardware improvement.
If you look at it from a different point of view, though, there is plenty of room for them to evolve. Children today don't watch that much TV. Take my 16-year-old son, for example. Apart from watching some sports, he almost never watches TV with the rest of the family; instead he spends most of his at-home leisure time communicating via the social networking site, Facebook.
It's clear that customer preferences are changing, and I think this fact indicates what the next steps in TV evolution are likely to be. We'll never recapture our customer's hearts by merely offering better color or higher resolution.
We developed brand new, absolutely incredible technology for the PlayStation 3 (PS3), but the cost was high. We've adopted a slightly different approach now, and are evolving the PS3 into a platform for Web services. TV development is also in a period of transition; the fact that sales volume is growing for the Apple TV, a kind of set-top box, might be evidence of an emerging trend.
We have to become a company that can open the window and say, "Look, we don't just design technology because we love technology. We design technology because we understand that our customers are different." We can no longer say that we're right and our customers are wrong. We can't build only what we want to build.
Right now is an excellent opportunity for consumer electronics companies to improve their understanding of consumers.
Five years ago content companies were regarded as king in our industry, but that was wrong: the customer is king.
Sure, some people might say, "This guy doesn't know what he's talking about." But I reached this conclusion after spending more time on the road, worldwide, than most executives.
Consumers today are a lot different from how they were 20 years ago. They aren't passive any more. The spread of the Internet has given them the power to dictate how products are used, and an increasing number of people are discovering new ways to have fun, such as by creating their own content.
A diverse range of electronics will be connecting to the Internet in the near future, tapping Web-based services, and we have to think about what we need to do to make our customers - the king - like our products. I think the key to this lies in watching our customers. If a Sony employee were to ask me what a reasonable market price might be for distributing video to the home, I would tell him, "Don't listen to me; watch our customers."
Understanding customers will also help us uncover hidden customers. The Wii from Nintendo Co Ltd of Japan is an excellent example. They didn't develop any unique technology; they just realized that there was potential demand out there for something different from conventional games, and thought about how to satisfy different demands from different age groups. They attained results that the PS3 hasn't; namely, generating profit from hardware sales.
(Continue to the next page)
Nikkei Electronics Asia magazine is available each month free of charge to engineers, managers and other qualified readers.
Nikkei Electronics |
Nikkei Monozukuri |
Nikkei Microdevices |
Nikkei Automotive Technology |
|---|---|---|---|
 |
 |
 |
 |
| The magazine for electronics designers and managers. | Design You Won't Regret - How to Reduce the Risk of Accidents | The most comprehensive technical journal for makers and users of LSIs and LCDs. | The comprehensive automotive technology magazine. |
Copyright © 1995-2009 Nikkei Business Publications, Inc. All rights reserved.
All editorial content and graphics on this Web site may not be reproduced in whole or in part without the express permission of the copyright owner.
November 2009
October 2009
September 2009