The Bellagio casino-hotel in Las Vegas hosted a shotgun wedding in January. The bride and groom had met just a couple hours earlier; she wore a skimpy dress, he was in powder blue coattails.
The ceremony was actually a PR stunt. But the man who brokered it, incoming Sony Corp boss Kazuo Hirai, was dead serious.
The guests were mainly journalists assembled in Vegas for the annual Consumer Electronics Show. The couple were a pair of actors hired from a local talent agency. They were supposed to represent the Internet and Sony's Bravia television sets — their match symbolizing the consummation of the company's years-long, frustrated quest to marry hardware with content.
His ability to make that union a reality, says Hirai, will define his tenure at the troubled Japanese brand. When Hirai becomes Sony's president and CEO on April 1, he takes charge of a company facing a crisis unlike anything it has experienced in its nearly 70-year history.
It's been years since Sony has produced a new mega-hit device. Its TV business is an albatross that has accumulated losses of $10 billion. The company is on course for a fourth straight annual net loss for the year ending March 31. Efforts to connect its vast entertainment and games content with its huge menu of gadgets began way back in the 1990s — but are still a work in progress.
What has flourished at Sony, after a bumpy start, is its PlayStation business, which Hirai ran for five years. His plan is to apply the PlayStation model company wide: extend its network to the rest of the Sony gadget family to create a unified content-delivery platform. Even if not by intent, it is a model close to Apple Inc and its iTunes.
The Sony Computer Entertainment model "is a bigger concept we can grow into a bigger space," Hirai, 51, said in a group interview at the company's Tokyo headquarters last month. "Hardware drives software and software drives hardware."
Interviews with former Sony bosses and executives, as well as current managers who will be working with Hirai, paint a picture of an executive who may have the managerial and personal skills to reach a prize that eluded his two predecessors.
But they warn he faces a daunting task in marrying hardware and software in the Sony family, which remains hobbled by a schism that undid his predecessors: a rift between old-guard gadget engineers and a new guard of executives that see the future of Sony in online networks and the entertainment content they deliver.
If he succeeds, he could be the man who saved Japan's most famous company. Failure means presiding over the fall of an electronics empire that once held sway over the world's consumers. A stock slide from an already depressed price, analysts say, could make it an acquisition target or, more likely, lure in private-equity investors who could sell off packaged units of the company bit by bit.
TV Strategy
Hints are emerging that Hirai may begin his comeback attempt by kicking TV out of the Sony home. "I think we have issues to address around the TV business," said Andy House, the head of Sony Computer Entertainment, which he took over last year when Hirai moved on to a wider role in the company.
An option being mulled, another executive told Reuters, is to divorce TV from the rest of Sony (and try and merge it with the battered TV businesses of Japan's other struggling set makers. Both Panasonic and Sharp are in trouble. It would be a marriage of convenience that a Japanese government anxious to safeguard jobs and spawn national champions could help forge, the executive added.
A framework for such a grand compact exists already. Last year, Sony agreed to bundle its small operations for making liquid-crystal display screens with those of Toshiba Corp and Hitachi Ltd. The merged company, Japan Display, is two-thirds owned by the taxpayer-funded Innovation Network Corp of Japan.
Hirai has geek cred. As head of the videogame business, he once got hold of a specialist train-driver control to play a train simulator game, "which gave me endless fodder for geek jokes", House recalled in an interview.
He'll need that to gain the trust of engineers. They fear the company has lost its golden touch for making cutting edge gadgets in favour of the content side of the business, such as games and movies, which was nurtured under the past two chief executives, Howard Stringer and Nobuyuki Idei.
Hirai got his start in Sony's music business and isn't an engineer. But that doesn't handicap him, says Phil Molyneux, the CEO of Sony Electronics Inc in the United States.
"Let's not forget, underneath Kaz there are some very strong leaders who have engineering backgrounds," Molyneux said in a p h one interview.
Sony’s schism
Sony's issues are much deeper than where to go with the TV business. Hirai faces a fundamental divide in the company that pits an old guard of engineers, mostly in Japan, against device-agnostic content champions, many of them in the movie and music centers of the United States.
The chasm opened up in the mid-1990s. Later, Sony missed a chance in 2001 to fix that mistake, says Satoru Maeda, a former Sony executive who created the Airboard, a progenitor of tablet PCs that the firm dropped.
Unsure the iPod music player he had just released would be the hit it was, Steve Jobs suggested an alliance with Sony in launching his iTunes store, in part to counter the might of Microsoft. Not wanting to upset the software giant, Sony turned him down.
On February 2, Sony said it expected a 220 billion yen loss for the year ending March 31.
