Sony bringing back the 'wow factor'

After telling reporters that the company has fixed its financial problems, CEO Howard Stringer reveals plans for PS3 Network, OLED TVs, but no robots.

Planned networking services for the PlayStation 3 video game console are a key part of Sony's new drive for innovation, Chief Executive Howard Stringer said Tuesday.

Stringer, who took over as Sony's chief executive in 2005, also said televisions using new panels called OLED and the Rolly music player with robotics technology were strong products that showed Sony is back after its restructuring efforts.

Such products "bring back some of the wow factor" that is a Sony trademark, he said, speaking to reporters at Sony's headquarters.

Stringer said the massive three-year cost-cutting drive he began to turn around the electronics and entertainment company had gone well, and immediate financial problems had been solved.

"The next cycle is actual innovation," he said, referring to software and other networking products he said will deliver growth for Sony.

Sony's network service, now used to download video games for the PlayStation 3, will be expanded to offer other kinds of content. He did not give details or a timetable.

Besides its core electronics business, Sony owns the Hollywood movie studio that made the "Spider-Man" series. Sony also has a joint venture in music with Bertelsmann AG that has Bruce Springsteen, Justin Timberlake and Beyonce Knowles under its labels.

Such entertainment content will likely be offered as downloads for the PlayStation 3 in Sony's effort to catch up with U.S. companies like Apple (Charts) and Microsoft (Charts, Fortune 500), which dominate in software. But Stringer said the network service will be open to outsider content.

When Welsh-American Stringer took the helm at Sony, the company - once a symbol of innovation with its Walkman line of personal stereos - had been stumbling, falling behind in flat-panel TVs and digital music players.

The three-year turnaround plan that Stringer engineered - which included massive job cuts, plant closures and dropping of unprofitable businesses -- will be completed in March next year.

The company has sold off part of its stake in its financial unit, which had a bank and insurer. Sony has also sold to Toshiba its advanced computer chip operations for making the "Cell" chip for the PlayStation 3.

Stringer talked proudly about the OLED TV and Rolly.

Sony began selling this month in Japan the world's first television for the commercial market with an organic light-emitting diode display, or OLED. The 11-inch display on the TV called XEL-1 measures just 3 millimeters, or 0.12 inches, thick, and delivers clear vivid images.

Rolly, which went on sale earlier this year, is a rolling dancing, egg-shaped music player that flaps its lid-like ends and flashes lights.

Stringer made clear he planned to stay on as chief executive and steer the next three-year plan.

"Am I going to be here for the next three years? And the answer is, 'Yes,"' he said.

Stringer was also upbeat about Sony's recent operations, saying that PlayStation 3 sales were going strong worldwide, boosted by price cuts and helped by a shortage of the rival Wii console from Nintendo.

As many as 200,000 PS3 machines were selling a week in Europe, while 40,000 to 50,000 PS3s were selling a week in Japan, Stringer said.

Stringer acknowledged it was still unclear which next-generation video platform will emerge the winner, although he said Blu-ray disc, the standard Sony backs, appeared to be ahead of the competing HD DVD format, backed by Toshiba and others.

Hollywood studios' response has been mixed in releasing films in either format or both.

"We have momentum," he said. "But that's all we have at the moment."

Stringer said Sony (Charts) has no plans to revive its robots business, such as the Aibo pet robot, because of the big investment required and competition against Toyota Motor Corp (Charts)., Honda Motor Co (Charts). and others.

"You always have to pick your bets," he said. "We made the decision two and a half years ago when we were confronting negative margins in the electronics company that if something had to go in the short term, that was it."
(Source money.cnn.com)