Sony
(SNE) CEO Howard Stringer uses his D6 stage time to show off his tiny,
expensive OLED screens. We're told they're amazing, but that's hard to
tell from a distance. We do know they're expensive: The model that's
for sale is $2,500, and Howard won't venture a price for the new
card-thin model. But unless you live in a very very fancy neighborhood,
your neighbor won't have one anytime soon.
Photo: Asa Mathat, AllThingsD
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Transcript follows:
A couple of years ago Howard Stringer had high hopes for his
e-reader. But Jeff Bezos Kindle has stolen that thunder, and we assume
we might hear about that when Walt Mossberg chats with him. We
definitely know we're about to see a very, very thin TV.
Howard comes out to "Turning Japanese" (do the D6 folks know what that song is supposedly about?).
So Sir Howard, how are things going? "We're coming on, I think...
culturally the word "profit" is not high on anybody's agenda in Japan.
We're turning that around... there's a sort of sense that we're
climbing the mountain. We're nowhere near the top, we're about halfway
up."
But TVs are doing well, right? Yeah, but we're not making any money:
"If we have any more success we'll be bankrupt". Why can't you make
money? It's a commoditzed business. Lots of overhead from old biz we've
exited, and race for market share puts pressure on prices.
What's next, beyond the LCD? LCD has had a good run, has plenty of
life in it. But now getting excited about OLED. Very expensive at the
moment, but is in the market. $2,500 for an 11" screen. DreamWorks guys
like it a lot. I have one on my desk. It's really, really bright. Time
to see the demo:
As we worried, it's really really hard to get a sense of what an
OLED screen looks like when you're looking at on stage. But, as
predicted, here comes the 0.3 mm thick OLED, thickness of a
playing card. Will come out in 27-inch version fairly soon. Not at mass
market quantity, and it will be "quite expensive... the only people who
can buy one are in this room."
Do you believe that this will supplant LCD? "I'm biased. I have mine
on my desk, and I haven't turned on the wall screen since I've had it.
It's a perfect television companion."
Making these panels yourself? Yes. Very technolgically sophisticated. Can't outsource.
PS3: Profitable business yet (no, it's not). Downward slope of PS3
curved was "mildly catastrophic" for a while... "was on life support"
but is booming now. "We're very pleased". Becomes a server, movies,
Playstation network has 5 million people, and we'll demo new one
coming. The next game out, in June, will use full capacity of game
machine, which no one really has done yet.
Are people really using it as a movie machine/entertainment hub?
They're starting to. And we're connecting it to PSP, other machines,
etc. It's the beginning of a sequence of a train of events that will
ulimately be fairly thrilling - MSFT and AAPL trying to do same, of
course. We won DVD format battle because of Blu-ray player in PS3.
Walt: I thought you won the battle because you paid off the studios?
Howard: No, we didn't pay as much as the other guys. It cost us because
we had to cut Blu-ray player price way down, but we weren't in the
check-writing competition. We have great suport from the studios.
OK, so you won the next-gen DVD format war. What's the real value in
that, as things are moving to digital downloads? "We live in the
Silicon corridor up here, and we think that the things that are
happening to us are happening to everybody...but it's going to be a
long time, I think, before you can get the quality you can get on
Blu-ray... I agree, it was a lot of wasted money on this battle... but
we wanted [the format] to last for 10 years and beyond" But a bit of
candor from Howard here: Had we lost the war, "the headline would have
been `BetaMax 2'. And that would have been on my tombstone."
Walt disagrees about "Silicon Corridor" idea. Lots of people have
digital music players. So the idea isn't new. Howard: Billion new movie
customers coming online in Asia. They agree to disagree, basically.
How about movies in general, what's going with that business and
what will become of it? Still sticking around. Shared experience
important. People said rock concerts on way out, but they're picking
back up again (not completely true, really).
PC business? Best year ever last year. 7% margin. But marketshare is
down, right? Why aren't you #1 or #2 PC vendor? Because we're very
expensive. Is this a strategy? "Yes. The less profit the better." Our
engineers like trying to being on the cutting edge...compares his
company to Apple (but Apple enjoys very nice margins on its hardware).
Walt taking Howard to task over "craplets" on his Sony computers
(this is a big thing for Walt). Wants him to take anti-craplet pledge.
Howard won't bite. "You're not a typical consumer." Not true! says
Walt. Everyone's got my back on this! Howard: "I promise you a craplets
review."
Digital music players: We've sold about 170 million music-enabled
phone. Way more than iPods. Sold that in the space of a year and half
to two years. We started music phone trend! Were doing more and more
downloading relationships. We've got one with Usher (who's a Sony BMG
act). The music player itself, overshadowed, is coming back a bit
(we've heard this ourselves). "We're a long way off. But we're back in
the game. We recognize our failings, and we keep trying."
Are the days of stand-alone players numbered? Nah. There's room for two devices, or three devices.
Q from audience: How do you keep innovating across wide range of
products? It's hard. You can see dilemma with Sony Reader and Kindle.
People say we're not innovating, but we're innovating on all of our
products. Plus, we've got the Rolly! But it's tricky to find
entrepreneuers in company, especially in Japan, who can create
small-scale success with new products. There isn't that tradition in
Japan. Trying to find way to mimick it, so we can have some excitement.
Making Sony a home for entrepreneuers is the next big challenge. "Did I
answer your question?" "That was brilliant" "Really? Are you looking
for a job?"
What's going on with telco v. cable faceoff? Talking about non-settop TV deal announced yesterday.
We've been pushing for it for a long time. It's a "singular achievement
for us", done mainly with Comcast leading the charge. "There are
gatekeepers everywhere, guarding their turf. Sometimes I'm sympathetic,
but not often... on the other hand, I'm open to the Tim-Berners Lee
approach, which is to make it open."
Can you ever get software that works as well as your hardware?
Maybe. Look for our home game network. We've hired an excellent
software guy but I'm not going to point him out because you'll all
chase after him. But this is also an organization challenge. Software
has to work across multiple platforms. Don't laugh but we're now
thinking about software at beginning of process instead of the end.
Steve "Insanely Great" Levy: Wants to know what Howard thinks about iTunes, basically:
"I have my own hositlites to the iTunes experience." I know it's
unpopular in this room, but AC/DC, for instance, never released their
music on iTunes. They think their body of work should stand on its own.
They don't want to sell singles, and iTunes insists on it. I think
competitior to iPod very healthy.
Music labels "have learned our lesson" and are working with artist,
trying to find new ways to express themselves. "The vanishing album is
problem that I'm concerned about. Maybe I'm just old."
Event ends - Howard tells Walt "This wasn't as funny as last time"
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