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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.

Update: Sony has suspended the 2.40 upgrade, following reports that it has fouled up some PS3 systems (see Joystiq for more). While the two PS3s we have here at CNET were able to install the update with no adverse effects, it appears that some users were considerable less fortunate.

The 2.40 firmware update for the PlayStation 3 is now available. The free update, which Sony has been talking up for the past several days, adds a smattering of new features, including in-game access to the XMB (Cross Media Bar) home screen, custom soundtracks, a new trophy system, and a shortcut to Google searches.

The new features carry a host of caveats: the in-game XMB, customized soundtracks, and trophies aren't supported on all games; in-game XMB features are fairly limited; and the trophy system (with the a few exceptions) won't be retroactive to already-accomplished goals.

Trophies, for instance, are better viewed as a feature that will begin becoming more useful as future games begin supporting the feature. That said, both the trophy system and in-game XMB help the PS3 better compete with the achievements and Xbox Live or Xbox Dashboard features offered by the Xbox 360.

PS3 users will also notice a handful of other simple but useful touches with this update, including an on-screen clock, a quick shutdown icon, and a shortcut to Google searches. And speaking of the PS3's browser: while it's not new for 2.40, it's worth noting that the Web browser splash screen now includes shortcuts to YouTube, Flickr, and Facebook.

So what do you think? Does the 2.40 update add some worthwhile features to the PS3, or does the Xbox 360 or Nintendo Wii still have an edge? And what other features would you like to see come in future PS3 software upgrades?

PlayStation.com: Firmware 2.40 walk-through, part 1 (embedded above)
PlayStation.com: Firmware 2.40 walk-through, part 2
PlayStation.com: Firmware 2.40 FAQ

The chatter for a July price chop gets louder.

(Credit: Microsoft)

With Metal Gear Solid 4 finally available for the PlayStation 3, it doesn't take a genius to predict that the PS3 is going to get a boost from having a hit console-exclusive title under its belt. Nevertheless, analysts are boldly proclaiming change is asunder. Sony's got the Big Mo--as in momentum--while Microsoft's got the big Slo--as in demand for its Xbox 360 is slowing down. Which inevitably means the price-cut rumors are getting the Big Sto--as in stoke those flames, baby.

Joystiq is reporting that EEDAR analyst Jesse Divnich, "Believes the PS3 is going to keep increasing its sales and Microsoft will announce a price cut for the Xbox 360 at E3" next month. And in another shocker, Divnich, "Foresees the PS3 gaining momentum and claims Metal Gear Solid 4 will actually have a greater impact on the console's hardware sales than Grand Theft Auto IV did." God, these guys are good.

The post goes on to note that the "Xbox 360 could also get a new hardware SKU with added features" (Blu-ray anyone?) and that Divnich claims that "if Microsoft does cut the price, Sony will respond with a drop of its own within two months." Unfortunately, Divnich doesn't predict exactly what the price cut will be, but I'm saying $50 across the board, with the XBox 360 Elite dropping to $399.99, the Premium (20GB) to $299.99 and the Arcade (no hard drive) hitting $249.99 or even less. It's about time someone matches the Wii's pricing, right?

Anyway, feel free to predict your own pricing scenarios and new models in the comments section.

Sony Computer Entertainment announced Tuesday that it is again delaying the launch of its 3D social-networking gaming service, "Home," for the PlayStation 3.

The PlayStation Home Open Beta service is expected to begin in the fall, nearly a year after its expected launch date. Sony unveiled the concept of its Home service more than 12 months ago and had anticipated at the time a full launch of the service at the end of last year.

Sony, in delaying the service launch, noted it wanted to expand its closed beta program to more PS3 users. The pending Home service is targeting its virtual community of PS3 users.

"We have come to the conclusion that we need more time to refine the service to ensure a more focused gaming entertainment experience than what it is today," Kazuo Hirai, Sony Computer Entertainment president, said in a statement. "Our overarching objective is to provide users with new gaming experiences that are available only on PlayStation Home."

Could the PS3 be getting Netflix support soon?

(Credit: CNET)

The PlayStation 3's newest v2.30 firmware just came out yesterday, but Sony isn't show any signs of slowing down its updates for the PS3. In a blog yesterday, Senior Vice President Peter Dille wrote this enticing tidbit:

Many of you have been hearing rumblings about a video service that will allow you to download full-length TV shows and movies via PLAYSTATION Network for North America. While I don't have any new announcements here for the PlayStation Nation, it's already been confirmed that we'll be offering a video service for PS3 in a way that separates the service from others you've seen or used. Ultimately the goal of the PLAYSTATION Network service will be to break through the overwhelming clutter of digital media to give you the TV, movies, and gaming content you want. More on this very soon...

That sounds pretty promising for PS3 fans, but until we get more information, all we can do is speculate. Just a few months ago, there were plenty of rumors about Netflix coming to the PS3.... Read more

Sony wasn't kidding when it said the next PS3 system update was coming in mid-April. Just in time to take the edge off tax day, the version 2.30 of the PlayStation 3 system software is now available for download. As revealed last week, the software update adds DTS Master Audio decoding (to deliver the best audio from compatible Blu-ray movies), as well as a major overhaul of the interface for the PlayStation Store (as explained in the Sony video walkthrough shown above).

The question is: what do you think? Does the DTS upgrade make the PS3 an even better Blu-ray player? Does the PlayStation Store makeover finally put Sony's online offerings on par with Xbox Live? Is all of this irrelevant compared with the forthcoming releases of Grand Theft Auto IV and Metal Gear Solid 4? Let us know what you think.

(Credit: CNET)

Sony has announced the details on the next PS3 firmware update--version 2.30, coming mid-April--and the big news for home theater fans is that the PS3 is getting onboard DTS-HD High Resolution and DTS-HD Master Audio decoding for Blu-ray movies. Home theater fans have long lamented that the PS3 could not decode the new DTS soundtracks at their highest resolution, especially since movie studios like Fox have opted for DTS-HD Master Audio on many Blu-ray releases. Without getting too technical, DTS-HD Master Audio offers 7-channels of lossless audio at 96K sampling frequency and 24-bit depths--which means that the sound sent to your receiver should be identical to the studio master.

While some sticklers will point out that the PS3 can't output Dolby TrueHD and DTS-HD Master Audio in bitstream format, it's definitely a non-issue. Decoding the audio at the source is actually better than having the ability to bitstream high-resolution soundtracks, since it means even people with older HDMI-capable receivers can enjoy the high quality audio. Sure, your receiver won't light up the pretty DTS-HD Master Audio logo, but who cares--you still get the same great sound.

We have ranked the PS3 as the best Blu-ray player for quite some time, and this only sweetens the deal. Almost all of our major complaints have been addressed, except for the fact that it still doesn't work nicely with a universal remote. Some diehard home theater fans will cringe at the idea of using a game console as their main disc player, but they should get over their hang-up as the PS3 is currently the best Blu-ray has to offer and it also happens to be the cheapest. And you can play high-def games and stream music, movies and photos.

The new firmware will also include a much-needed overhaul to the PlayStation Store. The official PlayStation Blog posted a walkthrough of the new store, and we have to admit it looks pretty good. Check it below.

The world's first 2.0-compatible Blu-ray player.

(Credit: CNET)

The PlayStation 3 is the first Blu-ray player to support BD-Live functionality, thanks to a firmware update available today. Officially announced just last week, the update (version 2.20) was released right on schedule, and is now available as a free download to PS3 owners directly through the console's onscreen interface. Once installed, it allows the PS3's to access Internet-connected BD-Live content available on some discs. The list of compatible discs is currently minimal--just War and Saw IV available now, plus The Sixth Day and Walk Hard following on April 8--and the first round of BD-Live content doesn't seem to be very diverting. But as the list of supporting titles grows--and, ideally, the BD-Live content becomes more compelling--look for players that don't support Profile 2.0 compatibility to be confined to the clearance shelves. The PS3 remains the best bet for Blu-ray shoppers, even if they have no interest in using its gaming capabilities.

CNET's Gamespot posted a news blurb today on a report that, "Microsoft has entered into talks with Sony to bring Blu-ray to the Xbox 360." The report comes from a Financial Times story that quotes an unnamed "senior executive," who says that Sony and Microsoft "are not simply discussing a successor to the Xbox 360's now discontinued, dirt-cheap external HD DVD drive," but that "there is also the possibility of an internal Blu-ray drive being incorporated into a new, more expensive 'premium' 360 model."

Cocept art for MGS4, which won't fit on a DVD.

(Credit: www.azeemalim.co.uk)

At the Consumer Electronics Show in January Xbox group marketing manager Albert Penello alluded to the possibility of a Blu-ray option for the 360. However, Penello wasn't talking today and Microsoft denied that it had made any official move to Blu-ray.

While you could argue that having a built-in Blu-ray drive is now a competitive advantage for the PS3, Sony stands to make millions in licensing fees for the technology if Microsoft adopts it. That possibility presumably trumps the potential edge Blu-ray might give the PS3. As for Microsoft, at a certain point it has to consider going Blu--partially because premium game titles are beginning to push the limits of a DVD's 8.5GB storage capacity. The PS3-exclusive Metal Gear Solid 4, due out in June, apparently fills an entire Blu-ray disc, though it's unclear whether it's a single-layer 25GB disc or 50GB dual-layer disc.

What do you think? Will disc capacity force Microsoft to make the move to Blu-ray--or is it just so that it can say it's game console also plays Blu-ray movies? Let us know by posting in the comments.