Sony Plans for Fewer, But Better Products

New CEO says he'll focus on TVs, MP3 players, and next-gen DVD systems to revitalize business.

Paul Kallender, IDG News Service

Sony is banking on rear-projection TVs, digital music players, and next-generation DVD systems to revitalize its core electronics business, Howard Stringer, the company's newly appointed chief executive officer, said at a news conference in Tokyo Thursday.

He will also narrow the company's overall range of products to include only those he thinks Sony can make a profit on, he said in his second day on the job. He did not indicate which of Sony's many products might be cut.

"A company as big as this one... has to organize its priorities. In the U.K. we call it the law of raspberry jam: the wider the culture is spread, the thinner it is spread," he said.

Sony has been hit hard by price wars in products such as DVD players, and has found it hard to make a profit even on goods that sell well, such as digital still cameras. In the year to March, Sony's electronics business posted an operating loss five times bigger than that of the prior year.

The company has also lost leadership in some key product categories. The company created the portable audio player market with the Walkman, for example, but these days Apple Computer's IPod dominates the field. Sony hopes to change that with its Network Walkman.

Hoping for Hits

The company has already decided on a few research and development programs to cut, allowing it to concentrate on what it hopes will be smash-hit products, Stringer says, without providing details.

Many of those winning products will be built around two of Sony's newest technologies, he said: the Blu-ray Disc format, which Sony has picked to replace the current DVD format, and the Cell processor, which was co-developed with IBM and Toshiba and will be used in the upcoming PlayStation 3.

While Sony refocuses its products strategy, it will also come up with new financial targets, Stringer said, when he will have finished a review of the company that he began in March with Ryoji Chubachi, Sony's new president.

Sony has said it will fail to meet its current target of reaching a profit margin of 10 percent in the year to March 2007.