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photo: DOMINIC NAHR FOR THE WALL STREET JOURNAL
OVERVIEW Sony is making a heavy investment in 3-D technology in an attempt to resurrect its electronics business and regain leadership in home entertainment The 3-D market is already crowded with competitors, but Sony is hoping that its early entry will help it avoid price wars that destroy profits Sony’s CEO wants 3-D to be a unifying force for the company’s varied entertainment businesses that can help it take on less-diversified competitors LINKS SUPER BROADBAND: Google to build a new high-speed network. Article. ADOBE VS. APPLE: The iPad sparks a conflict over Flash video. Article.
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Sony in Depth
By DAISUKE WAKABAYASHI With its famed electronics business in a rut, Sony is placing a huge bet on 3-D technology in the hopes of regaining its leadership position in the world’s living rooms.
CEO Howard Stringer is driving every unit of the struggling giant—from TV production to the movie studio to its videogame arm—to advance three-dimensional viewing in the global marketplace. Mr. Stringer’s wager comes at a time when the 3-D market is already packed, and getting more so: The top four TV makers, representing more than 50% of the global market, have also committed to a big 3-D push. Smaller companies are expected to dive in, too. With competition so intense, the field could quickly go from emerging to overcrowded and result in a brutal, profit-killing price war. ‘HARD TO IGNORE US’ The signs of congestion were on display earlier this year at the annual Consumer Electronics Show in Las Vegas, where Sony showed nine different big-screen TV models and sizes—about a quarter of its new TV lineup—all capable of displaying 3-D video. Sony executives predict the 3-D industry will grow to more than $11 billion in product sales within three years, more than 10% of the company’s current revenue, helping restore profitability to a TV business that has lost money for five straight years. They say 3-D will eventually make up as much as half of the company’s TV lineup, help double its global market share and pull it closer to Korean giants Samsung and LG Electronics, which have pushed the onetime television leader to third place in recent years. Mr. Stringer is hoping that 3-D will be the key to a “united” Sony, one whose varied businesses—from movie production to electronics to software—make the company better positioned to take on less-diversified competitors. It’s a goal Sony executives have tried to achieve for years, with only limited success. Three-dimensional technology “will give new life to many of our products,” Mr. Stringer said in an interview. Sony says it expects to minimize fallout from a potential price war by getting in early. But the competition is already fierce from companies such as Panasonic and LG. The challenge for Sony and the other electronics makers: persuading people to adopt 3-D so quickly after millions of households just made the transition to high-definition video. Consumers would have to buy brand new TVs, which, by some estimates, could cost between 10% and 20% more than the HDTVs currently on the market. MUCH TO GAIN Perhaps no other company has as much to gain, or lose, from 3-D as Sony. Sony Pictures makes 3-D films. Sony’s digital projectors are used in 3-D movie theaters. Sony’s broadcast equipment will outfit new 3-D TV networks. The company’s televisions and Blu-ray players will bring 3-D into homes. And its PlayStation 3 game console will play 3-D videogames. This summer, it plans to start selling its new televisions, a 3-D Blu-ray disc player and a free 3-D software update for its PS3 that allows people to play 3-D videogames and watch 3-D movies. It also plans to eventually introduce a 3-D digital camera, camcorder and Vaio computer. Whether it was Apple with music players, Samsung with televisions, or Amazon.com with e-book readers, Sony has repeatedly been overtaken in businesses where it was once a leader. Mr. Stringer is determined not to let that happen again. He has pushed hard for a 3-D strategy, fighting resistance from some of his own executives and using news of a Panasonic 104-inch 3-D plasma screen as a “wake up call” to his team. Now, says Mr. Stringer, “There is a sense of excitement and urgency. I don’t need to flash the whip anymore.” Sony Pictures executives have been flying to Tokyo monthly to give tutorials on how moviemakers use 3-D. From those discussions, electronics engineers have been tweaking Sony’s 3-D TVs to improve picture quality. Sony says this knowledge is helping to improve its broadcast-quality video cameras and edit- While engineers tackle technical hurdles, Mr. Stringer has been busy advocating the technology. He sees sports as a critical application for 3-D. Sony agreed to be an official sponsor for a new, 3-D sports network from
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