Gazing inside Howard Stringer's crystal ball

With signs of a recovery in the consumer electronics market, Sony has recently placed bets on a couple of technologies that it thinks will be big in 2010: 3D television and Internet delivery of content to its TV sets and other devices. But they aren't the only technologies interesting CEO Howard Stringer right now. On Thursday he sat down with a small group of reporters at Sony's Tokyo headquarters and talked about the technology he expects will drive growth at Sony in the coming years.

Sony's content-delivery plans call for the launch of service in 2010 that will feed movies and other video content to Sony TVs via broadband lines. It will be an extension of the PlayStation Network and expand to carry a wider range of content to more devices over time.

Sony has already held a couple of limited trials of online movie delivery, most recently offering the Sony Pictures hit "Cloudy with a Chance of Meatballs" to Internet-connected Bravia TVs in the U.S. before the DVD and Blu-ray release.

"If we come back [from the recession] with a great screen with IPTV capability and movies delivered in a very early window then I think we're in with a real shot," Stringer said of Sony's ambitious goal of a 20 percent share of the LCD TV market in 2012.

Much of the success of the service will come down to making it easy to use, he said.

"I saw the latest UI, which was designed in house, and I think it's the best I've ever seen. It was really wonderful. Searching for movies and searching for products and so forth, it was really so impressive," he said adding with a smile: "No one has seen it yet so you'll just have to take my word for it."

The company's other big push in 2010 will be the roll-out of 3D-compatible TVs.

"I'm very excited about 3D," said Stringer. "We should be front and center because we produce the cameras, the projectors, the games."

Stringer has spent much of the last three years reorganizing Sony so that different parts of the company work together efficiently. The 3D push will be a big test of Sony's capability to tie hardware, software and content operations together for a single technology.

"I saw a 3D soccer game the other day," he said. "When a goal was scored you could read the lettering on the ball. That was cool."

Sony has its eye on other technologies too.

A couple of years ago it scored a world's first when it debuted the XEL-1 OLED (organic light emitting diode) TV however sales have been poor due to the steep price tag. The 11-inch TV costs about US$2,000 due to difficulties in mastering mass-production techniques. OLED screens are thinner than current LCDs and offer images that are more vibrant.

"We are still trying to find ways to make that a product that goes into the market on the right side of the ledger," said Stringer. "Everyone in the organization loves the product. It's the kind of product that 30 years ago you could have made a lot of money on because you could probably have charged the premium required but in the recession it's been very difficult on all companies with luxury products."

Sony currently procures many of its high-end LCD TV panels from a joint venture it runs with Samsung Electronics in South Korea but will this month begin investing in a new joint venture with Sharp. The deal secures it a share of screens made at Sharp's new Sakai plant in Japan but Stringer said Sony continues to work on display technologies.

"We have other ideas too," he said. "We don't want to be dependent on someone else's panels for the rest of our careers."

In a couple of other technology areas Sony is starting to see encouraging results from Blu-ray Disc and the PlayStation 3, which suffered from poor sales when they first launched. Stringer said he is encouraged with their recent performance.

The bandwidth available on Blu-ray Disc compared to HD DVD, the format it beat, has made an enormous difference for 3D capability, he said. "Had you been left with HD-DVD and its very limited bandwidth it would have set back not just high-definition but opportunities in 3D and beyond."

PlayStation 3 sales, poor for the first few years, have also begun picking up with a recent price cut.

"I think finally PS is beginning to have its day. Which isn't to say it's profitable yet but the momentum does seem to be in the right direction," he said. Sony is aiming to return its game business to profitability in the financial year that begins in April 2010.

Copyright © 2009 IDG Communications, Inc.

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