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July 2, 1990

SONY EXPLAINS WHY ONLY FOOLISH VIRGINS WOULD BET AGAINST IT BECOMING A COMPUTER LEADER

By CBR Staff Writer

While the established suppliers seem to be concentrating on short term developments, Sony Corp has been looking well ahead into the 1990s and is convinced that its expertise in miniaturisation and audio-visual technology will make it one of the leading players in information technology, and particularly in the workstation arena – so much so that by the end of the century it expects to be getting over half of its revenues outside its traditional mass market electronics business, reports 01 Informatique. According to Yumihiko Suzuki, international sales director of the Super Micro Systems Group, Sony has every chance of catching up despite its delayed entrance: True, our News workstations only made their debut early in 1987, but Sony’s decision to give this kind of activity the highest priority was announced a full 10 years ago; since then, information technology has occupied an increasingly important position in Sony’s overall strategy for the next century. This is borne out by the figures, with Sony’s activity in this area – comprising semiconductors, telecommunications equipment, up-market microcomputers and various periperals – up by 28% to $2,670m for 1990, against a 21.6% rise in the year before. This leaves information technology accounting for 15% of the group’s total business, a figure that Suzuki sees increasing each year: Apart from the growth we are experiencing in our tradiional business, Sony should become a true systems integrator as opposed to just a component supplier. This may seem somewhat optmistic, but Sony Microsystems’ strategic alliance director Susumu Steve Shinbori argues that our confidence is based on our vision of the fundamental characteristics of tomorrow’s multi-media workstation; it will handle text and data, but will also integrate digital sound and animation – and here we have to big advantages: expertise in both miniaturisation and audio-visual techniques. What’s more, synergy between different activities in Sony has existed for some time now, and it gives us an enormous headstart when it comes to designing and building this type of computer. Nigel Dear, sales director for Sony Microsystems in Europe, agrees, claiming that Hewlett-Packard has already pin-pointed us as a competitor to watch particularly closely.

Manufacture in Europe

Nonetheless, while their success in the Pacific Rim is undeniable, the News workstations have yet to take off significantly in any of the other international markets. But Suzuki remains unconcerned: We certainly are behind our competitors today, but our policy of lending out our workstations to applications developers is showing very positive results: at the moment, our catalogue consists of some 400 Japanese software packages and around 80 packages from outside Japan. By the end of 1991, we hope to have 25% of our information technology business coming from exports, with between 60% to 70% of that figure coming from Europe, which we intend to lead our international growth. Finally, it is clear that manufacturing in Europe is also something Sony is looking at – when sales merit it – indeed, Suzuki maintains that delocalisation of manufacture is part of our basic strategy. Anyone betting that Sony will not succeed in its objectives, but which US or European electronic companies have shown comparable willingness to take a 10- or even a five-year view of their business to ensure that they’ll still be major players at the start of the next century. Certainly not General Electric Co, which doesn’t seem to be able to see beyond next quarter’s numbers in valuing its various businesses – with the result that it runs the risk of ending up like Western Union Corp, saddled with a string of the 21st century equivalents of telex. NCR Corp has more timely vision than most, and perhaps Hewlett-Packard Co in computers, Motorola Inc in telephone communications, are making the right moves. But IBM is frantically trying to shore up its tottering edifice, belatedly attempting with Systems Application Architecture what it should have done 15 years ago while DEC

‘s strategy, aided by the fact that it has at least achieved a single proprietary product line, seems to be to do whatever IBM is doing quicker and better.

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