“We don’t want to go back to being a box company..”

Profile of Sony in Newsweek:

Sony, home of transistor radios, Trinitron, Walkman, Betamax, Bruce Springsteen, Spider-Man and Gran Turismo, now wants to be known as the home of connected entertainment in the digital age. CEO Nobuyuki Idei understands that the Net and the chip have exploded Morita and Ibuka’s world. He compares the old Sony to a prop plane that he is outfitting for jet propulsion: from a company that makes stand-alone products shipped in boxes to one that produces an almost organic swarm of interconnected devices, services and experiences, all riding on the blurred pulses of a ubiquitous wide-spectrum network. (Do you hear a stirring of ghosts?) “We have to change our culture from the manufacturing industry to knowledge-based global culture,” he says. “Kind of a reinvention of the business model itself.”

WHERE SYNERGY THRIVES
What enables Idei to think that such a thing can be done is Sony’s breadth. It is the only company with premium positions in both the gizmo world and the media world. At AOL Time Warner, synergy is an epithet, but in Tokyo the promise not only survives, but thrives. To Idei, everything comes together with his beloved buzzword: broadband. Sony will create not only network-connected products but also devise services that deliver the content – much of which Sony owns through its own music, movie and game divisions. (The early models for this include the wildly popular online game called EverQuest and an interactive television guide.) Sony may even have a hand in new forms of currency used to purchase such services: through its own bank, the company offers Tokyo train commuters a smart-card payment system.

….At the recent consumer Electronics Show, the SDR-4X was the featured guest in the climax of Kunitake Ando’s keynote. The much-anticipated presentation was carefully crafted to emphasize the strides Sony was making toward its broad-band goal. Beginning with music video clips from J. Lo and a trailer from the “Charlie’s Angels” sequel (its costar Drew Barrymore dropped in to help demo Sony’s new toys), the speech was crammed with cool Sony stuff: next-gen flat-panel screens, DVD camcorders, Airboard screens that controlled a range of devices and even a prototype VAIO PC “sensor” computer shaped like an ashtray you’d find in a hotel bar.
After the keynote, Ando unwound at a dinner for a few journalists, where talk turned to the knotty problem of digital rights. He startled everyone by speculating that in the long term, given the nature of Internet copying, record labels may not have a future. “When you have a problem like this,” he says, sighing, “I really wish we were a simple hardware company.” But of course the mission of Morita and Ibuka was never all that simple: their passion was succeeding at tasks that their competitors never considered. Pushed by those ghosts, Ando and his boss Idei can go nowhere but forward. “We don’t want to go back to being a box company,” says Ando. “If we lose our dreams it’s not Sony at all.”