From push to pull – Sony’s digital vision

Sony, more than any other consumer electronics maker, is a company that likes to look to the future to develop products for the present.

Sir Howard Stringer, the group’s chief executive, continued the tradition with his keynote speech at the Consumer Electronics Show (CES) on Thursday, in which he unveiled a plan to focus on four categories and place Sony at the forefront of dramatic changes taking place in the consumer entertainment market.

Sir Howard and other senior Sony executives said in private briefings after the keynote that Sony also planned to abandon its scatter-gun approach towards new product launches and be far more focused on what Sir Howard calls “champion products”.

Sir Howard said that in the past Sony has suffered because it tried to equally market to too many products. In future, he said, the company would throw its full weight behind fewer products with strong revenue potential.

As examples, he highlighted the upcoming PlayStation 3 video console, the PSB Portable games player and the Sony Reader – a new electronic book reader that Sony will launch in the US market in April along with book titles that customers will be able to download via Sony Connect service.

After many failed attempts at developing a successful e-book reader Sony believes it now has the technology and support of the publishing industry to make the Sony Reader a success.

Using jargon in his keynote that lay people might struggle to understand, such as “e-entertainment” and content being “pulled” rather than “pushed”, Sir Howard said Sony would concentrate on products that would give consumers more freedom to enjoy entertainment content wherever they were and whenever they wanted to.

The first category of products comprises high-definition equipment and highlights Sony’s determination to become the leading supplier of products for the home that will enable users to create, watch, store and edit content in high-definition.

They include Sony’s high-definition camcorder that will produce personalised HD video to be viewed on its recently launched full high-definition TV, Bravia – Sony’s LCD TV brand that has taken a maker leading 30 per cent share in the US since its launch.

“All over the world, broadcasting is becoming high-definition and Sony has all the necessary technology and products to cater to the new demands of the market,” Sony says.

The impact of high definition “may be even more profound than the shift from black and white to colour television,” Sir Howard told his audience.

The second category encompasses products that underpin the shift from analogue to digital technology in TV broadcasting and the cinema, including professional filming cameras and digital projectors for movie theatres.

While the analogue to digital shift in Hollywood is still in its early stages, “US cinemas will shift rapidly to digital technology”, Sony believes.

The third category is the PlayStation, of which the next generation PS3, as well as the currently available PlayStation Portable, will be more than just a games console. For example, users will be able to watch TV programmes on their PSP terminal anywhere in the world by accessing a public wireless local area network. At the CES, Sony is showing a prototype mobile phone that will offer similar functionality.

The fourth category of e-entertainment products groups together gadgets, such as mobile phones, car navigation systems, digital still cameras and the Vaio range of PCs.

Sir Howard says that these products will cater to a growing desire among consumers to be able to access entertainment and other content in a more personalised way than is currently possible. So, rather than watching whatever TV broadcasters decide to show their audiences, people will increasingly go to get what they want to watch when they want to watch it.

The strategy Sir Howard outlined is not, strictly speaking, a new direction, but a further push away from analogue technology and into the digital age, Sony says. It means Sony will accelerate its divorce from standalone products that cannot be linked to networks, it says.

One worry is that the last time Sony came out with a grand strategy to realise its vision of the future, it did not translate into sales. Sony ended up with unsold gadgets, such as Cocoon – a portable keyboard-like channel server providing always-on access to the internet through the TV.

The lesson Sony learnt from the battle between its Walkman and Apple’s iPod is that it badly needs a few successful blockbuster products to carry it forward.