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March 21, 1996

NEW SONY CHIEF IDEI SETS OUT HIS STALL, STRESSES PERSONAL COMPUTERS, SOFTWARE AND INTERNET HARDWARE

By CBR Staff Writer

Sony Corp’s newly appointed president Nobuyuki Idei is wasting no time making his presence felt at the company and has outlined plans to establish the firm in personal computers, Internet gaming hardware and as a developer and distributor of software. Eleven months after leaping over 14 senior executives to get the job once held by founder Akio Morita and current chairman Norio Ohga, Idei has shaken up the corporate flow chart and broken with tradition to rebuke managers who contradict his vision of Sony’s future publicly. In an interview with Nikkei Weekly, Idei spoke of his desire to take Sony into competition with the computer makers. Following Idei’s agreement with Intel Corp chief Andy Grove to discuss future directions on research and development, the company intends to push its audio-visual experience far into the computer industry. Idei’s plans include a possible deal with Apple Computer Inc, although an acquisition was not on the cards: We don’t have enough money to do so now, particularly because we are under the financial burden of maintaining Sony Pictures Entertainment. Sony hopes to improve its 80%-20% ratio of hardware to software and content and Idei sees the 1989 acquisition of Columbia Pictures, with its making and distribution of movies and television programming, as a key to Sony’s involvement in the computer industry. Once, the only significant forces in consumer electronics were the audio-visual giants such as Matsushita Electric Industrial Co, Philips Electronics NV and Sony, he said, followed more recently by South Korean players such as Samsung Electronics Co and LG Group Ltd. Now, personal computer makers have increasing influence in this area. You can now watch movies on your personal computer, and you can play compact disks on it as well, he said. It increasingly doesn’t make business sense for us not to sell personal computers when so many Sony-made displays are used in personal computers with other companies’ names. Making computers will not be without its difficulties, he admits. In mature product divisions, such as those for audiovisual goods, one has to forecast demand six months ahead to determine production levels now. But the computer division has to produce products almost on demand, he said, admitting that US and Taiwanese companies stole a march on Sony by being able to make decisions more quickly: With their awful speed of decision-making, Japan’s computer builders lag utterly behind. If the Japanese are a weekly magazine, then Compaq and Acer are newswire services. Sony also plans to bring together the traditional east-west separation of hardware manufacture in Japan and entertainments in the US, having experienced increasing difficulty in keeping the two apart. Idei plans to improve hardware development in the US and software development in Japan, assuming a change in the management structure to accommodate such new links between the two units.

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