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Sony's new team faces challenges

Sony Corp.'s executive shuffle comes amid the company's struggle to find its way in the rapidly changing world of consumer gadgets.
/ Source: The Associated Press

Sony Corp.'s executive shuffle comes as the electronics and media company struggles to find its way in the rapidly changing world of consumer gadgets while ensuring that its entertainment content finds a secure home in the budding digital age.

Some of the challenges faced by Sony's new management team:

Besides electronics, Sony is in the music and movie business. While this would seem to be a natural combination, the company seems to be struggling in making its content available to its gadgets. Part of the problem appears to be a battle between openness and security. Media creators want to ensure that their offerings are safe, so that the business doesn't fall victim to piracy. Consumers want simplicity and interoperability.

Music players
Sony pioneered the market with its Walkman more than a quarter century ago, but it long ago lost its lead and technological edge. Today, Apple Computer Inc.'s iPod is the digital music market leader and consumer favorite.

Sony's answer is the Network Walkman, a hard-drive based player that was released last year. But it only played songs using Sony's ATRAC3 and ATRAC3plus audio formats, not the more common and popular MP3s. Sony has since changed its tune, but is it too late?

Connect online music store
Sony's answer to the popularity of Apple's iTunes Music Store is Connect, which only offers songs in its proprietary formats. In addition, Sony's copy-protection system is more restrictive than Apple's iTunes, allowing file transfers to just three computers. Some of the rules also change depending on the music label.

Sales of traditional sets are on the decline and prices are falling for more advanced digital TVs. Meanwhile, Sony faces more competitors and a shrinking market share. Sony is in a particularly difficult position with plasma TVs because it doesn't make its own screens but has to keep up with rivals' steep price reductions.

Sony has denied reports that it plans to stop making plasma TVs.

Video game consoles
Sony's popular PlayStation line is expected to see a major upgrade in 2006. Meanwhile, sales of the current PlayStation 2 are on the decline as consumers wait for the next generation.

Emerging technology
The next-generation PlayStation is expected to be powered by a chip jointly built by IBM, Toshiba and Sony. The "Cell" processor, however, has yet to be proven, and its developers have been reluctant to provide technical specifications until recently.

Though some technical details emerged earlier this year, the companies have yet to divulge prices. It's also not clear how well Cell will compete against traditional personal computer processors that appear to be moving in the same technological direction.