After navigating some rough seas, Sony's Electronics division has been starting to right the ship.
Over the past year, the company has been forced to rethink its product lineup and catch up to competitors in some cases, but now the Japanese electronics giant's U.S. division is looking ahead and betting big on the future of flat-panel televisions and high-definition media.
CNET News.com sat down with the head of Sony Electronics' U.S. operation, Stan Glasgow, to talk OLED (organic light-emitting diodes) TVs, Blu-ray Disc, the importance of the PlayStation 3, consumer electronics, and the dwindling margins for manufacturers and retailers on notebook PCs.
During our chat, Glasgow made it clear that Sony is only focused on TVs when it comes to the impossibly thin OLED technology and that soon the company's 3mm-thin TV will be even thinner. And, though the company just won a long and drawn out format war with HD DVD, Glasgow spoke openly about the limits of Blu-ray and what the medium still lacks. Plus, he sounds pretty high on the mini-notebook concept, even if he won't admit the company is developing a product yet.
Stan Glasgow, president of Sony Electronics USA
(Credit: Erica Ogg/CNET News.com)The following is an edited and condensed version of the interview.
Q: You have an 11-inch OLED and said you'd be putting $200-plus million into the next stage of investment. How big are we talking here in terms of screen sizes?
Glasgow: In the short term, which is a couple of years--I'm not going to be more definitive than that--we have targeted a 27-inch. We've showed it as CES, we've targeted the initial investment, and that's what we're looking at in the short term. Certainly in the longer term we'd like them to be the same size as LCD. We'd like them to be 52 inch, 46 inch, 36 inch...it's just a matter of time.
What about affordability? How long until these are affordable for the mainstream consumer?
Glasgow: It's going to be years and years until price points come down to where they're anywhere close to LCD. In the not-too-distant future, you'll have a choice in LCD at this size, or you can buy an OLED at the same size at a premium. I almost see it as a potential--and I don't know this, nobody knows the answer--I almost see this as the upper end of flat-panel television.
We can continue to make it thinner. It's 3 millimeters now, but it can get thinner. Eventually it's printable on a plastic substrate that can bend. But I don't think it's going to take many years to get to that level.
What about applications in other devices? I know Samsung's talking about monitors next year.
Glasgow: We are focused on TVs. Our interest is strictly television at this moment. I'm not saying that will never change, but at this moment that is the most complex area to go after. The bigger you make these, the more complicated they are. They're much simpler to make smaller. So it'd be easier to jump into cell phones, and other types of products, but that's not what we're interested in doing. We're interested in television as our major focus. Our engineering is focused there, and our investment is focused there.
Speaking of televisions, the experiment mentioned last week, with Hancock coming out on the Bravia Wireless Internet Link, is that a one-off kind of thing? Or is there more in the works there?
Glasgow: I'd say maybe it's a step above an experiment. It's brand new what we're doing, how we're doing it. We're trying to excite people by giving them content. It's streaming so we don't have the content protection problems...(But) people's bandwidth across the country is very different.
Prototype OLED TVs
(Credit: Michael Kanellos/CNET News.com)The big problem in the United States is we don't have enough bandwidth to really drive content through the Internet and our pipes. Japan has much better pipes, so does Korea, so does Europe. So it's still experimental. we hope to do more in the future, and it's the first one. We're going to try and see what happens.
What about non-Sony content?
Glasgow: It's possible in the future. I'm not going to rule that out; I don't think anyone at Sony would rule that out. (But) we think it's a good first step.
Besides interactive menus feature on Blu-ray, is anyone doing anything that's a really creative use of the medium that we don't know about yet?
Glasgow: There's so much I have no idea about, because we're going to have to open this up as a social network--not just contributions of Sony and other Blu-ray partners. There are going to be contributions from actual customers.
If we had a dream (for) Blu-ray, it would be much more interactive than it is today: No. 1, where you could interface and change things as you want to see them on the screen. No. 2, you could socially interact with other people, it's connected through the Internet...but theoretically you and your friend could watch the same movie, and you could change themes, change endings, all sorts of strange things in the future. Some type of social interaction in the future....And yes, we'll have a lot more (Blu-ray) product out in the next couple of months.
Looking ahead, you're only just getting into Blu-ray. How do you see the future penetration of the format compared with DVD?
Glasgow: That's a good question. DVD took 10 years to really penetrate. We're now in the second year of Blu-ray. My guess is it will probably happen a little quicker in terms of penetration. The pricing is already coming down more quickly than DVD came down. I don't think it will take as long as 10 years, but I don't think it will penetrate to the same percentage because there's a couple of conflicting forces. Certainly, people that want the best picture are going to want it, without a doubt. People that are OK with upconverting DVD players, which is somewhere close to 600, 650, maybe 700 (lines of resolution)--that's not a bad picture either. So a lot of people may be happy with an upconverting DVD player. And (Blu-ray) may not turn over, it may not penetrate to the same extent, because (DVD) was such a big medium change from tape.
But I see it being the major format. It's won the war, that's done. Now it's a matter of: Can we provide an exceptional experience? Can we provide a social part? And can we involve the overall community in, let's say, designing applets and coming up with new things that we can't even think of today?
How critical is the PS3 to your overall electronics strategy here in the U.S.?
Glasgow: I think that there's strength in Sony...it's about having a gaming division and an electronics division, a pictures division, a music division--we've never worked together like we have now. Hancock is a great example. We're so well-connected together. Here we are doing an experiment with a film. We're going to promote the heck out of it through our electronic retailers. The gaming division is working on it at the same time. (The) music (division) is involved. We're operating as a very balanced group. So what I can say is, without the gaming, we wouldn't be as strong and as balanced as we are today. It adds a great deal.
What do you think the effect of these ultra-low-cost computers' popularity will continue to have on the notebook business?
Glasgow: The question is, how important is that in the United States and developing countries? We're doing a lot of research on what consumers want and don't want. And I think we'll get it figured out over time. But is it worthwhile to have a second notebook that starts up quickly, can only do e-mail and connect to the Internet, can't do spreadsheets, and other things you'd normally do? Those are the things we're testing right now.
But what do you think? Do we need fewer devices? Or more?
Glasgow: I'm not the normal consumer obviously. I do an awful lot of e-mail, I connect a lot. I'm not happy with the (BlackBerry-type devices), like this Sony Ericsson I carry around. I find it hard reading, I'm getting older, and it's getting too small. But I don't want to carry my notebook around because it takes awhile to start up. So something in between would be very cool, and it wouldn't bother me to have an extra PC around.
That's sort of what we're thinking in this country. I think the emerging countries are different...But in terms of the U.S., we have a lot of homework to do.
Now, last month there was a report that Quanta was making a mini-notebook for you guys. Is there any truth to that?
Glasgow: I can't say yes or no. I love all the rumors, though.
What do you think about this Blockbuster/Circuit City proposed tie-up as far as retail electronics goes? (Note: later that same day Blockbuster announced its plans to abandon its bid for Circuit City.)
Glasgow: It's fascinating what's happened in the last 10 years in electronics retail. The big have gotten much bigger and extremely successful, like a Best Buy. The smaller guys, regional retailers, have done extremely well. The middle-sized guys have gotten into a lot of trouble. It seems that the companies expanded too much, but haven't prepared the infrastructure properly to service customers.
It's also interesting to watch how well Wal-Mart and Target have been doing, in terms of building more consumer electronics...
Circuit City--we want a very strong No. 2 (electronics retailer). Best Buy is certainly the leading company. We would like Circuit City to be strong. How that gets done--it can be done in many different ways.
My hope is that either by themselves, or by merger, or by working with another company that they'll be stronger than they are today. We think the possibility is there, and we support them. A good, strong No. 2 player in consumer electronics is a positive thing for manufacturers. They've got 800 stores. There are not many companies that have 800 electronics stores.
The Gateway notebook roll-out is official. Sony's is not. Gateway Computer announced three lines of notebook PCs on Monday with 64-bit Windows, while Circuit City prematurely posted images of upcoming Sony notebooks.
Gateway 14-inch T6836
(Credit: Gateway )Gateway rolled out three notebooks targeted at students. The P series desktop replacement comes with a 17-inch widescreen, the M series with a 15.4-inch screen, and the T series uses a 14.1-inch screen.
All systems come with 64-bit Windows Vista Home Premium and pack 4GB of memory--the minimum for acceptable performance in 64-bit Windows.
(See Gateway goes all 64-bit in back-to-school desktops.)
The 15-inch "Garnet Red" Gateway M-6848 is spec'd with an Intel Core 2 Duo T5750 processor, 4GB of memory, a 250GB hard disk drive, 802.11a/b/g,a wireless, DVD-R/RW drive, and Vista Home Premium 64-bit with SP1. It retails for $799.99.
The 14-inch "Pacific Blue" Gateway T-6836 notebook has virtually the same specifications. It also retails for $799.99.
Other features include a multimedia panel integrated into the keyboard, DVD burner with LabelFlash technology, and an integrated Webcam.
Upcoming Sony retail notebook
Meanwhile, details about upcoming Sony notebooks continue to seep out.
Circuit City prematurely posted photos of the upcoming Sony portables. (Though Circuit City has pulled the links, cached images are still accessible.)
Last week, less colorful user-manual images appeared at Notebookreview.com as well as tidbits about various models. Apparently, models will use Intel's next-generation Centrino 2 "Montevina" processor, graphics chips from Advance Micro Devices' ATI unit, and sport 13- and 16-inch screens.
Worldwide PC shipments are on pace to grow 15.2 percent in 2008, according to IDC. That's above the analyst firm's March prediction of 12.8 percent growth. But laptop shipments, which have become an increasing force in the PC market, will peak.
Shipments of portable PCs should grow 34.5 percent this year, according to a PC shipment tracker that IDC released this week. That's up from 33.9 percent in 2007 and way above the projected 13.4 percent for next year. By 2012, according to the firm, portables will increase by only 9 percent.
PC makers such as Hewlett-Packard are betting big on notebooks. The company this week released 17 new models, mostly for consumers.
(Credit: Hewlett-Packard)By the end of the year, PC makers will have shipped 310 million units, close to half (145.1 million) of which are notebooks. The rest are desktop PCs and servers, which together on a global basis still comprise the largest slice of the market, but the difference is disappearing fast.
Portables are especially expected to take off internationally this year, growing from 78 million in 2007 to 109.4 million units this year. That's good news for the industry because notebooks and laptops tend to be pricier than desktop PCs, and they should keep average selling prices higher for a bit longer.
But inexpensive notebooks are stirring up the market too. A reason for the dramatic 40 percent bump in international portable shipments has a lot to do with how the numbers have been counted, according to IDC.
The firm said it had previously not included the rapidly growing low-cost mininotebook segment because of the "use of nontraditional PC designs, including the use of embedded or custom operating systems, (as well as) reduced processing power and storage," IDC said. But now, due to the popularity and computing robustness of the Asus Eee PC, the Classmate PC platform from Intel, and OLPC's XO, mininotebooks are included. Plus, the firm notes, the volume of units shipped are actually rising.
Those three manufacturers have some company in the consumer space. Acer, Hewlett-Packard, and perhaps Dell already have, or plan to release, their own tiny laptops.
It may be sitting pretty atop the PC market, but Hewlett-Packard isn't going to sit still.
The world's largest PC manufacturer plans to roll out 50 new products Tuesday at a conference in Berlin, the largest such product refresh in the Personal Systems Group's history. Of those products, HP added new touches to just about everything, freshening up its TouchSmart all-in-one desktop, commercial and consumer notebook lines, as well as two machines within its high-end gaming brand, Voodoo PC.
While it's that time of year for product refreshes, this is more than the usual speed bump or spec tweak. Though competitors like Dell, Acer, and Lenovo are increasingly focusing on consumer retail PCs, HP is showing that it doesn't want to give up any of the ground it's gained over the last couple quarters.
"They're fortunate for being in right place at right time: being in consumer, and being in retail," said Richard Shim, PC analyst with IDC. "They're showing they're not taking that for granted, and keeping consumers engaged in the products."
It's a tough task when most PCs are made by the same manufacturers with products from shared suppliers. That's where HP hopes its new and improved TouchSmart PC comes in.
It's slimmed down in size--far more minimalist in design concept--and price compared with the original model, but the key is really the improved touchscreen interface. Exterior design used to be a way to stand out, but with a category in decline like desktops, a unique software experience could be an attention-getter.
Offering an experience that you can't get from a Windows-based Dell, or even an Apple iMac, is complicated, said Shim. "That really separates the major players from the minor players, since only the big guys can afford to do this kind of thing. HP is taking advantage of its position in the market."
The new HP-only interface is also a kind of "end-run" around Microsoft's Windows we'll be seeing more often, said Ross Rubin, director of industry analysis for The NPD Group.
It's already happening in the mininotebook category, where instead of being limited to one option for an operating system, PC vendors are offering different flavors of Linux, as well as alternate interfaces that sit on top of Windows.
Design continues to be a priority for HP, as evidenced by the new products, from the high-end to the refreshed line of consumer notebooks, to the new brushed aluminum finish for its commercial Elite line.
But it's the Voodoo brand where HP is most able to experiment with new looks.
Last week, Rahul Sood, Voodoo PC's founder and current CTO of HP's global gaming business, released photos of him cutting his birthday cake with the famously thin MacBook Air. In the accompanying blog, Sood slyly remarked that he "wouldn't be needing this notebook for long anyways."
The Voodoo Envy 133
(Credit: Hewlett-Packard)That's because HP's got its own razor-thin notebook now, called the Voodoo Envy 133. Though the price (starts at $2,099) puts the machine out of reach for most mainstream PC buyers, the ultrathin and light Envy is HP's attempt to position the Voodoo brand name in the same arena as Apple and Lenovo. For now Voodoo still has limited awareness outside the gaming and performance PC enthusiast crowds. As with the Blackbird 002 gaming desktop, the Envy will tie HP's recognizable brand to up-and-coming Voodoo.
The other Voodoo product released Tuesday is a departure for the brand in another way. A new gaming tower, the Voodoo Omen, is unlike anything HP has released before, and has no real counterpart in terms of design in the gaming world. The Omen is stark and simple on the outside, with brushed aluminum tower with the Voodoo logo on the face replacing colorful plastic. It's nearly the exact opposite of last year's Blackbird, or
Despite all this, there's still big challenges for HP ahead as it attempts to differentiate its products from the rest of the field and offer a wide array of products. Not only are they trying to take on Apple in terms of design and innovation, but it's still doing battle with and old, but suddenly resurgent foe, Dell. Plus, Acer is selling notebooks like hotcakes, and even Asus is trying to push its way into the consciousness of the mainstream PC buyer.
So despite the progress the company has made, HP can't get comfortable.
"The challenge for them, is that other guys will do same thing," observed Shim of IDC. "The difficulty for HP is to integrate new technology and new innovation and still remain price competitive."
The proliferation at Computex of ultra-small, inexpensive netbooks poses this pesky question: why are traditional ultra-compact laptops so expensive?
The Asus Eee PC 1000 debuted this week with a 10-inch screen, 40GB solid state drive, and Windows XP. Pricing has been rumored at between $600 and $700.
Features and size threaten to push the Eee PC 1000 netbook into a category traditionally referred to as subnotebooks--with one glaring difference: price.
Subnotebooks like the 11-inch Lenovo IdeaPad or Sony Vaio TZ series typically start at above $1,500 and go up from there, ranging up to $3,000.
HP mini-note and traditional ultra-portable notebooks: both ultra-compact designs, but big price gap
(Credit: HP)But as netbooks inevitably add more features, analysts and industry insiders are beginning to wonder what will happen to the traditional laptop category. "(If) you add more (gigabytes) of storage and a bigger screen, I don't know what makes this any different than a normal laptop," said Avi Cohen, a managing partner at Avian Securities.
Cohen said the obvious downside is a slower Atom processor--compared with a mainstream Core 2 chip--but on the upside Atom has better battery life. "Arguably there's a category of consumers that don't need such high processing power. Or, at least, a different kind of processing power," Cohen said.
Maybe many more than computer makers realize. Industry sources familiar with Intel's netbook strategy also see a potential clash of categories eventually. "Of course, it's always been a concern, as (netbooks) gets more and more traction," said one source familiar with Intel's thinking on this topic.
And as netbooks add more features and creep up in price, Intel has to worry about the market confusion that may ensue. "Is a $700 laptop, even running Atom, a netbook?"--the source asked. That may be the question that laptop vendors and Intel will have to grapple with as the netbook category grows.
(An Intel company blog back in March described the netbook as a small laptop "designed for wireless communication and access to the Internet. And they cost about $250, making Netbooks a potentially disruptive and high volume market segment.")
Of course, subnotebooks like the HP 2510p, Lenovo IdeaPad, and Sony Vaio TZ offer more features than today's netbooks: faster processors, more memory, bigger hard disk drives, and usually larger screens than a netbook like the HP Mini-Note.
But two forces may be working against this purported advantage: One, all of these features may be overkill for a lot of consumers who use traditional, pricey subnotebooks for only email and simple Web browsing. And, two, netbook makers may continue to expand their offerings to push them closer to subnotebooks while keeping the price low.
This is something that Glenn Henry, CEO of Centaur, the Via Technologies subsidiary that designed the Isaiah processor, has said. "The one gigahertz (Isaiah) is plenty powerful enough to do lots of things," Henry said. Via is also targeting the low-cost netbook category--and has been for some time. Its C7 processor is currently used in the HP Mini-Note 2133.
"If this category continues like it is, at the end of the year you may have mega hard drive-based netbooks," said the source familiar with Intel's strategy. "Let's say someone comes out with a really nifty (design), it's got some extra features, a bigger screen, and a few extra bells and whistles. I don't think that's a netbook even if it's running an Atom processor."
What is it then? That's the $64,000 question.
After months as the subject of speculation in the media, Acer will introduce its own low-cost mini-notebook PC at the Computex trade show in Taipei on Tuesday.
The device will be called the Acer Aspire One, as expected. It will come with an Intel Atom processor, and run Linpus Linux Lite, with Acer's own user interface. Other specs include: an 8GB solid-state drive, 512MB of RAM, 802.11 b/g WiFi, an 8.9-inch screen, and a standard 3-hour battery.
Acer Aspire One will begin at $379.
(Credit: Acer)The Aspire One will be available beginning July 2 for $379. Later that month, a version running Windows XP Home Edition with an 80GB hard drive, and 1GB of RAM will be available, though the pricing details on that have yet to be ironed out.
As this niche of computing begins to become more crowded, the specs are beginning to look more or less the same. Price and little details like keyboard and exterior design are going to be the most distinguishing factors.
At $379, the Aspire One is cheaper than the runaway hit Eee PC from Asus, whose 9-inch version begins at $549 for the Linux version, and the $499 Linux-based Hewlett-Packard Mini-Note. (CNET has not yet reviewed the Aspire One, but stay tuned.)
Besides pearl white, Acer also plans to offer a bright blue version, and eventually pink and brown. The keyboard isn't quite as large as the Mini-Note's 92 percent keyboard, coming in at 89 percent of the standard size keyboard for a 14-inch notebook.
But just like its direct competitors, Acer sees two distinct customers for the Aspire One: school kids and the highly mobile tech-savvy set.
Acer's plan it seems is to use its Aspire One as sort of a gateway-PC (No pun intended.) for the uninitiated PC user.
"It's a great device that is a stepping stool to a first-time notebook user," said Sumit Agnihotry, director of notebook product management for Acer America. That way kids can "bypass the desktop completely (and move) to a notebook in less than 18 months."
And if there's something Acer's gotten good at lately, it's moving notebooks. It sells more notebooks than every other computer maker except for HP.
Acer says it sees the mini-notebook as a third device for geeked-out consumers after a smartphone and a standard notebook PC, claiming that "it's much more a single application with an Internet-centric focus," Agnihotry said.
But is it more devices we're after? Or fewer? The genius of the smartphone is how much it can do. With the $379 price point not all that far removed from some of Acer's more inexpensive full-size notebooks, is selling someone on the lack of features of the Aspire One really the way to win customers?
It's clearly not for the mainstream PC users, who generally expect the best features and latest-generation processors when purchasing a new PC. But the company doesn't seem to see any overlap between those customers, saying it doesn't expect this will "cannibalize" its current notebook business at all.
Sony is prepping a notebook based on Via's OpenBook reference design, PC World is reporting.
At the WiMax Expo taking place in Taipei, contract manufacturer Quanta Computer showed a mini-laptop based on Via's just-released design that will be out in the third quarter of this year. A sharp-eyed reporter spotted Sony as the listed manufacturer for the device. When questioned, Quanta representatives apparently clammed up, and it doesn't appear Sony will be commenting either.
The mini notebook has an 8.9-inch screen, at least an 80GB hard drive, will use a 1.6-Gigahertz C7-M processor from Via, and sports a VX800 chipset. The prototype on display was running Windows Vista Home Basic.
So has the Vaio maker finally caved? In February, a Sony exec said if the Eee PC started to do well, and major PC makers started to chase the low-cost laptop market, it was the beginning of "a race to the bottom."
Too late. Hewlett-Packard, Acer, and maybe even Dell, are joining the low-cost, lightweight computing fray. And those are just the big names. Asus continues to crank out Eee PCs, and similar devices from no-names like MSI are widely anticipated.
Sony likes to position itself and its products on the high-end. But it started producing a line of its Vaio notebooks last year that sold for as low as $800. At the time, the company said it wasn't interested in going any lower.
Things, of course, can change. And though low-cost laptops are still a tiny niche of the market, it is another way for manufacturers to differentiate their product lines as notebook prices and profit margins continue their inevitable decline.
WiMax is in the cards for the Eee PC. Asus will demonstrate notebooks Monday that integrate WiMax chips from San Jose, Calif.-based GCT Semiconductor.
Asus Eee PC
(Credit: Asus)Despite recent statements that the Eee PC 901 will not get WiMax, GCT Semiconductor announced--along with Asus--Sunday that Asus has integrated GCT's GDM7205 WiMAX single-chip silicon into the F8 notebook series and Eee PC.
GCT says the F8 series and Eee PC will be demonstrated with WiMax at the WiMax Expo Taipei that begins on June 2nd.
The widely-reported specifications for the Eee PC 901 are a 1.6GHz Atom processor, an 8.9-inch screen, solid state drive (12GB or 20GB), 1GB of memory, and either Linux or Windows XP. A future version of the Eee PC is expected to get WiMax.
Intel will also be demonstrating WiMax in the Asus M51VA notebook at Computex. Versions of the Eee PC may also come with the Intel WiMax chipset.
But Asus is clearly working with GCT also. "We are pleased to be working with a proven industry leader like GCT, who has enabled Asus to provide our customers with systems containing reliable high performance WiMax capability," said Jellent Sun, Asus' senior director of notebook product marketing, in a statement.
GCT said that its single-chip WiMax solution enables "lower power consumption for longer battery life, smaller form-factor design and lower bill of materials cost."
GCT is also supplying WiMax chips for notebooks based on Via Technologies silicon.
Chip designer Via Technologies unveiled its OpenBook Mini-Note reference design on Monday, in a move that throws some open source into its core business of developing chips for mobile devices.
The OpenBook design aims to aid PC makers in creating ultra-small notebooks based on Via's Ultra Mobility Platform. Last year, the company trotted out its Via NanoBook reference design, a prototype designed to compete against rivals in the small-computer market but at a lower cost.
"By making the CAD files of the external panels for the OpenBook available for download, Via has simplified design customization. You can now download these open-source files from the (Via) Web site and individualize the look and feel of your OpenBook devices," Via states.
Via, in providing the source files for download, aims to deliver local Wi-Fi, long-range WiMax, and speedy data delivery via 3G mobile connectivity.
With its Via OpenBook design, the Taiwanese company is hoping to ride potential growth in the mini-notebook market, which currently ranks in the small niche category. But as 3G becomes more pervasive and users become more adept using smaller devices to carryout computing and communications functions, demand for mini-notebooks may rise.
PC maker Lenovo turned in a strong financial performance for its fourth fiscal quarter, with revenue, profits, and PC shipments all seeing notable jumps.
For the quarter that ended March 31, Lenovo said that profits attributable to shareholders grew 133 percent to $140 million from the same period a year ago. That figure includes $36 million in net profit from the sale of discontinued operations (its mobile handset business). Earnings per diluted share hit $1.44, a rise of 112 percent.
Revenue for the three-month period rose 13 percent to $3.7 billion.
China-based Lenovo said that worldwide PC shipments grew 21 percent, ahead of the industry average growth rate.
Notebook PCs outpaced desktops for the quarter, with notebooks making up 61 percent of total sales versus 38 percent for desktops. Notebook shipments were up 38 percent, while desktop shipments were up 9 percent.
The company's Greater China business accounted for 34 percent of total sales during the quarter, while its Americas business accounted for 27 percent, slightly ahead of the percentage for Europe, the Middle East, and Africa. Asia-Pacific sales excluding China accounted for 15 percent of sales.
