Sony Chat

Sony is becoming the exhibitionist of the media and electronics empires:

In a rare and incredibly candid interview, Nobuyuki Idei, Chairman and CEO of Sony Corporation, tells AlwaysOn what he really thinks. This is Part 1 of a three-part series.

At this year’s World Economic Forum, held recently in Davos, Switzerland, Tony Perkins sat down with Mr. Idei, with Sir Howard Stringer, Chairman and Chief Executive Officer, Sony Corporation of America, at his side, to discuss their take on technology trends. In this first part, Mr. Idei explains why he would buy Palm if they would sell, how Nokia doesn’t get it, and why his music and entertainment group needs to get their act together if they want to stay competitive.

Perkins: Mr. Idei, are we ever going to have a converged phone and PDA device that people will really want?

Idei: Palm is strong where the mobile phone is weak. So Palm’s big market is in America. We can’t sell Palm in Japan, because cell phones there are much faster and more capable [than in America]. This is because behind the Japanese mobile phones there are monopoly companies like DoCoMo. DoCoMo has lots of money, even to subsidize the hardware companies. This is very scary because they want to control every layer of the business. So how can we compete with a DoCoMo? That’s a whole other story. But there is only one DoCoMo in the world, so the market is fragmented, and it means Sony has a chance to do something here.

Perkins: What about your relationships with Palm and Symbian?

Idei: In terms of our OS strategy, it is not clear whether Symbian, which we share with the Nokia phones, is the right way to go for the mobile phone. And I can’t tell you why Sony has a Symbian OS on its phones and Palm OS on its PDAs. [Laughs] Even Bill Gates asked me if I was crazy. But this is our history. I really want to own either Symbian or Palm – I want to buy them. Three years ago the Palm was so simple, but it is getting better and better. My problem now is that as Palm licensee we have to pay them lots of money. Palm is like Apple – we don’t know if they are a software company or a hardware company. But they have now split in two.

Perkins: You would buy Palm’s software business?

Idei: Yes, if they want to sell.

Perkins: What about the rest of the mobile phone business, where is it going?

Idei: We have a joint venture with Ericsson, which for them is clearly kind of an exit strategy. They don’t care about the mobile phone business, they care about the base-station business, which is 90 percent, now 100 percent of their business. Sony made the joint venture with Ericsson because we want to be covered by their IP patent umbrella, otherwise we have to pay nearly 15 percent to the GSM license holder. I wouldn’t have been able to stand that.

Perkins: What about Nokia?

Idei: Nokia is focused on volume – selling as many cell phones as possible at a low price. But in my observation, I am not sure they know very clearly what the real opportunity is in the telephone business. We are talking about secure distribution of music on the phone.

Perkins: So, what about downloading music onto any device? Let’s talk about Sir Howard’s business here. These days, kids want to access all entertainment content from any place, at any time, on any device, but entertainment executives seem hesitant about allowing this.

Idei: My dream is to supply music to kids in a way where they don’t have to feel guilty. Today, they know that to download music for free is a crime. We have to protect the rights of the artists…. [Always On]