Stringer Talks Cell Chip And Sony’s Future

Chief Executive Howard Stringer said today he was pushing forward with a growth strategy that revolves around its powerful cell chip, and leveraging content to drive electronics sales. Sony has watched its fortunes fade in the consumer electronics market in recent years. The inventor of the Walkman has been unable to keep up with low-cost rivals and failed to come up with hit products as it did so consistently in the past.

But Stringer said Sony could still revive itself if its engineers worked more closely together across product lines to develop “champion products” that can’t be easily copied by low-cost Chinese and South Korean manufacturers. In a speech at an electronics trade show, Stringer said cell, a so-called “supercomputer on a chip” that was jointly developed with Toshiba and IBM would play a key role in adding value to its products.

Sony plans to first use cell in the PS3, its next-generation game console due next spring. The company has established a development team to find other applications for the chip such as in home servers and flat TVs. “The PS3 is only the beginning for cell,” Stringer said in a speech at CEATEC Japan in Makuhari, near Tokyo. “New intelligent devices will be powered my smaller and more powerful processors and will be directly connected with one another.”

Stringer is also banking on Sony’s large stable of movies, music and other content to boost electronics sales. As an example of this strategy, Stringer noted that Sony was enjoying strong sales of movie titles on a proprietary format for its hit PlayStation portable game console. The availability of movies, in turn, helps drive console demand.

“In the digital age, content lends both brain and muscle to our electronics business,” Stringer said. Sony, the world’s second-largest consumer electronics maker after Matsushita Electric Industrial, is expecting its first operating loss in over a decade this business year due to restructuring expenses and deep losses in its TV operations. To turn things around, Stringer unveiled a restructuring plan last month under which the company will shed 10,000 employees, or about 7 percent of its global workforce, shutter plants and sell off more than $1 billion in non-core assets.