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.
(Credit:
Samsung)
This picture of a Samsung OLED laptop prototype raises more questions than it answers. Just how thin and light is it? Is touch-typing possible on that keyboard? Where's the mouse pad? What's that panel behind the display? Why is the woman pictured on the display checking her pulse? When can I have one?
What a translated-from-the Korean Samsung page does reveal is that it's an AMOLED (active matrix organic light-emitting diode) laptop prototype that Samsung's display division developed for the Society for Information Display's gathering in Los Angeles next week. According to Samsung, the prototype features a 12.1-inch screen with a 1,280x768 resolution. Perhaps we'll be able to glean more information next week when the display scientists, engineers, and manufacturers get together. As for when we might see this product on store shelves, Samsung has previously stated it'll start rolling out OLED TVs, monitors, and laptops in 2009.
(Via Engadget)
Dupont and Dainippon Screen Manufacturing will form a strategic alliance to develop mass production techniques for organic light emitting diode (OLED) displays, according to an announcement made in Japan.
Sony OLED display
(Credit: CNET)The focus is on developing better processes and printing equipment for the fabrication of OLED displays.
OLEDs are attracting interest because the panels are paper thin but offer extremely high-quality images, superb color saturation, and fast response times. And they draw little power because they don't require a backlight.
At the same time, they face durability challenges. The organic matter used to illuminate the image can by ruined by the elements, so special sealing technology is necessary. Also, a new study by DisplaySearch found that the brightness on Sony's 11-inch XEL-1 TV began to degrade significantly after 1,000 hours.
That's not all. OLEDs face size constraints. Many of the widely-used, mass-market OLEDs used today are only between and three and four inches diagonally. Sony's XEL-1, one of the largest, is only 11 inches but is priced at close to $2,000.
Dupont and Dainippon hope to solve the size problem and bring down the cost in the process. Their goal is to develop printing equipment that that will enable the production of very large OLEDs that would rival the largest LCD TVs in size.
DuPont brings its small molecule-based OLED solution materials and process technology to the table, while Dainippon Screen has developed a nozzle printing technology.
Sony appeared to be on the verge of starting the next revolution in TV technology last year when it introduced its first OLED television, most notable for its paper-thin screen. The display, which uses bright and low-power organic light-emitting diodes, appeared so promising that the prospects for LCD and plasma TVs were soon called into question.
(Credit:
Sony)
A new study, however, may cast that future in a different light. A research firm called DisplaySearch tested Sony's XEL-1 TV and found that its brightness began to degrade significantly after 1,000 hours--translating to a loss of half its original quality in 17,000 hours, according to the Associated Press. That projection stands in marked contrast to Sony's claim that the display would last 30,000 hours or 10 years of typical use before reaching that degradation level, which is a standard industry measure.
The company reportedly stands by its claims, and DisplaySearch did acknowledge that longstanding longevity problems with OLED displays have been addressed in the latest versions of the technology. Still, the research follows other reports of production issues that have slowed Sony's development of the OLED TV as a mass-market phenom. And given the high cost of making them, which has produced retail prices of $2,500 for an 11-inch screen, they probably won't be a standard living room fixture anytime soon.
Sony's teased us for a bit with its impossibly thin, 11-inch organic light-emitting diode (OLED) TV, and finally brought it to the U.S. this year. Now it looks like there will be more to choose from in OLED TVs next year. Samsung SDI says that by 2009, not only will it have OLED panels for larger TVs, but also for monitors and notebook displays, according to a report in Digitimes.
OLED TVs on display at CES
(Credit: Michael Kanellos/CNET News.com)The report quotes Samsung SDI's VP of mobile display marketing, Woo-Jong Lee, who says that Samsung SDI will be able to produce 3 million panels in 2009, which is double what they can crank out now. Lee said the company anticipates doubling its capacity again by the close of 2010.
The liquid crystal display (LCD) industry probably doesn't have much to worry about yet. OLED panels are incredibly expensive to produce right now, and, yes, they're awfully pretty. (Sony's 11-inch display achieves a 1 million-to-1 contrast ratio, which is by far the best available for a TV.) But even as production increases from one manufacturer, it doesn't necessarily mean the prices will drop down to where flat panels have sunk. The 11-inch OLED TV from Sony costs $2,500. For that price you could also get a 50-inch Pioneer Kuro, generally regarded as the best plasma TV on the market.
Though Samsung has previously discussed making OLED TVs, the company still has yet to release one. A year ago Toshiba also said it's planning on investing in OLED panels. Sony is betting on OLED's eventual domination of the display market, but it's also heavily invested in LCD.
However, Panasonic, which owns the plasma TV market, doesn't anticipate LCD or plasma TVs fading out anytime soon.
Sony XEL-1 EL TV currently sells in Japan for just under $2,000
(Credit: Sony)There's thin. Then there's paper thin. Sony showed an electroluminescent (EL) display that's print-paper thin at the Display2008 conference in Tokyo.
The Sony EL display is based on organic light-emitting diode (OLED) technology that uses electroluminescent organic materials. OLED panels are extremely thin because they don't need backlights. The electroluminescent layer contains a polymer substance that directly converts electricity to light.
The panel shown this week at Diplay2008 is about 0.3mm thick, besting Sony's current 1.4mm-thick EL TV (photo). Epson lists its Premium Glossy Photo Paper as 0.3mm thick. So by this standard the panel is literally paper thin.
Sony also exhibited an 11-inch panel.
The most cutting of cutting-edge technology is always a sticker shocker. Sony currently sells an 11-inch EL TV (960×540) for a staggering 190,000 yen, or just under $2,000. That's right, an 11-inch display. Even smaller than the displays on subnotebooks, which typically come with 12-inch LCDs.
The image quality is stunning, however, producing the best--or close to the best--of all of the following: color, contrast, viewing angles, and refresh rates.
"It has a superhigh contrast ratio (allegedly, 1 million to one), it boasts faster response times than LCD or plasma, it looks incredibly sharp with colors that really pop--and because OLED screens don't require a backlight, they're more energy efficient than plasma or LCD," according to this CNET review.
Another thing: the organic matter used can by ruined by the elements, so special sealing technology is necessary for the displays.
Sony has been making smaller, 3.8-inch OLED displays for gadgets since 2004.
SAN FRANCISCO--Though times may be tough for other TV manufacturers, Sony says it isn't feeling a thing yet in its electronics division here in the U.S.
At a press briefing with reporters here Wednesday evening, Sony Electronics President Stan Glasgow said that despite indications of a weakening U.S. economy, all is well with the Japanese electronics giant.
"I don't think consumers buying consumer electronics yet feel that," Glasgow said. "Sony did particularly well during the holidays. It was the best in the history of Sony Electronics in the U.S."
A boon to Sony's bottom line has been the growth of its Sony Style stores, both brick-and-mortar outlets, and its online presence. Glasgow said Sony Style experienced a 34 percent growth in sales over the 2007 holiday shopping season.
Another high point was its TV business. According to data collected by market research company DisplaySearch, Sony lead all LCD TV manufacturers in the fourth quarter of 2007 with 12.3 percent of worldwide shipments, considered a major comeback for the company.
One of the things that appeared to help Sony in 2007 was its expansion of specific television models made to sell in Wal-Mart Stores and Target. Glasgow said the company is expanding that commitment to supplying those retailers with 40 percent more variety of TV models this year.
Glasgow kept the gloating to a minimum, however, when it came to Blu-ray's recent victory in the format spat with HD DVD. As one of the leading investors and supporters of Blu-ray, Sony does see prices dropping on standalone Blu-ray players over the next couple years, but it will be 2009 before a $199 unit becomes a reality, he said. Price drops will happen, but it needs to be done in an orderly fashion, Glasgow said.
"I don't see any reason to do it stupidly and lose money," he said.
In the meantime, Sony is "in discussions" with a number of partners in order to get them on the Blu-ray bandwagon. An Microsoft Xbox 360 console with Blu-ray is certainly "a possibility," he said.
But perish the thought that Sony will take trade-ins of now-obsolete HD DVD players. "Sony is not going to make up for Toshiba's sins," Glasgow said emphatically.
Other tidbits gleaned from the evening:
- Though 11-inch OLEDs are the largest size Sony is offering right now, bigger screen sizes are on the way--some day. But there are currently limits on exactly how big Sony can make them right now. Glasgow specifically said that there are major obstacles (mostly to do with the physics of creating the panels) to make OLED screens larger than 30 inches. "It would take another significant investment to get bigger than that," he said.
- Sony is apparently unfazed by Amazon.com's recent entrance into the electronic book reader market. "The Kindle has helped," Glasgow said. "I think the (Sony) Reader market needed a boost. We're selling more since the Kindle came to market."
The recording DVD player. These have been popular in Europe and Asia but have fallen flat in the U.S. Most companies don't even bother to put much effort into marketing them in this country.
The same phenomenon will likely hold true for recording Blu-ray and HD DVD players.
Makato Ebata, CEO of the consumer business group at Hitachi, gave us an explanation in a recent interview. Cable TV penetration is far higher in the States than Asia or Europe. With cable, the same show can appear on a channel several times. In Europe and Japan, you need to grab it when you can.
"The non-recording DVD player is quite popular in this country (the U.S.), but they are not popular in Japan at all," he said. "Here, you use them for the rentals. In Japan, they use it for recording."
TiVo also took off more rapidly in the States and elsewhere. TiVo, he added, is also one of the reasons selling TVs with embedded hard drives in the States remains a challenge. Selling these on the other two continents is far easier. Consumers interested in digital video recorders (a) already own one or (b) have more options on how to put one in their living room.
Of course, the recording debate doesn't apply to video cameras. Americans are shifting from tape to disc and hard drive camcorders.
Other notes from Ebata:
IPTV will become a more dominant theme for TV manufacturers. All of the major manufacturers will add content providers and services to their sets. So far, the manufacturers are avoiding the mistake of putting the whole Web on your TV, and instead popping up windows for must-have information like local sports and weather, or entertainment modules with wide appeal.
The question, though, will be how TV manufacturers can earn money from providing content.
OLED (organic light-emitting diode) TV is great and the technology will likely come to market, but it will take years to figure out ways to mass-manufacture large sets. (Panasonic, Sharp, and Samsung hold a similar opinion, but Sony says you will see it quicker. More here on the debate.) Another challenge lies in the fact that LCD and plasma continue to come down in price.
Plasma will survive. It doesn't have as many manufacturing backers as LCD and the public perception isn't great, but it remains competitive for large TVs. Hitachi makes plasmas.
LAS VEGAS--Why do the organic light-emitting diode (OLED) TVs from Sony measure only 11 inches across? Because large OLEDs are really tough to make.
While praising the OLED format during a press conference here with a few reporters at the Consumer Electronics Show on Monday morning, Sony executives acknowledged that producing large OLED screens in large quantities remains a work in progress. OLEDs now are mostly used in cell phones, which have small screens.
"The difficult challenge with the larger screen sizes is improving the yields. There are a lot of complications, many more than with LCD," said Katsumi Ihara, executive deputy president and head of Sony's Consumer Products Group. "The yields tend to be low. That is the biggest challenge."
(Credit:
Michael Kanellos )
The company declined to provide dates for when it might provide larger versions of the TV for sale. Sony is showing off a 25-inch diameter OLED prototype at the show this year, but it's the same size as a prototype the company showed last year. (We questioned whether yields were an issue in a post on Sunday, and here's your answer.)
Ihara added that Sony may seek collaborators in expanding OLED. Sony and Samsung have a joint venture in LCD TVs, and Sony worked with Toshiba and IBM to develop the Cell processor.
"It is too early to tell, but it is probably one of the options that we will have to consider," he said.
Despite the difficulties, Sony wanted to be first in OLED TVs, added Sir Howard Stringer, Sony's CEO. Sony was late to LCD, he said, and was subsequently forced to catch up.
"I was amused to see analysts say it is not good to be first and that it is better to be last," Stringer said.
View complete CES 2008 coverage from CNET.
Sony has shored up the problems in its electronics, and will concentrate in 2008 on bringing more video content to its devices and improving its software, said CEO Sir Howard Stringer.
"We will see if we can enter the battle against the software companies. This is probably the year we need to demonstrate that," Stringer said during a meeting with reporters at the Consumer Electronics Show in Las Vegas Monday morning.
One of the first examples of this strategy will be an expansion of the PlayStation Network. The network now is mostly used by gamers. Sony wants to turn it into a platform to deliver video, too. Sony will hold a press conference in two months to discuss changes to the PlayStation 3.
The world, of course, will wait and see. Consumers and analysts for the past several years have complained about the functionality of the software in Sony devices. The company, along with nearly everyone in the electronics industry, has also been trying to bridge the gap between the PC and the TV for years. But progress seems to be occurring across the industry. Microsoft says it has put nearly a million intelligent set-top boxes into homes, and Sharp and Samsung announced new TVs that serve up headlines and weather from Web sites.
Overall, Stringer seemed to be in an upbeat mood. A year ago at the same press conference, he had recently launched into a reorganization of the company and was in the midst of a notebook battery recall. Stringer and others noted that the software divisions didn't talk with the hardware divisions, and neither had much contact with the movie unit.
Now, all of Sony's divisions work more cohesively together, he said. Sales in many key areas are also up. Blu-ray players outsold HD DVD players during the holiday season, Sony asserted. Blu-ray accounted for 70 percent of the standalone high-def video players during the holidays, according to the company.
"Three years ago, we were not profitable in electronics. Now we are seriously profitable," he said. Observers will "also probably be pleasantly surprised" with results for Sony's third fiscal quarter, which come soon. Recent economic trends could put a damper on sales "but it's too early to be pessimistic," he said.
The reorganization has also allowed Sony to start coming out with more innovative products, such as the robotic Rolly device.
"We are now getting into the rhythm of innovation," Stringer said.
Stringer and other executives touted Sony's OLED TVs. The company, however, admitted that making large OLED TVs (the version on the market measures only 11 inches in diameter) is difficult.
Other notes:
--Stringer wouldn't directly comment on whether the Blu-ray consortium paid money to Warner to put its movies exclusively on Blu-ray. Stringer said Warner saw the value of the format but dodged discussing financial terms. "I think you are going to have to take that announcement at face value," he said.
The HD DVD group paid Paramount to commit to publishing its movies on the HD DVD format for a specified period of time in 2007. It was seen as a victory by the HD DVD group, but Blu-ray backers called the deal a form of a bribe.
--Sony Ericsson is going to concentrate more heavily in gaining market share in North America. Worldwide, Sony Ericsson has seen its market share rise to around 10 percent, but the weak place is the U.S., admitted Dick Komiyama, who heads up the group.
--Sony is also looking at incorporating its Cell processor, which currently sits inside of the PlayStation3, in other products. Cell is particularly good at manipulating video streams. The company even held a contest among engineers to design new applications. However, Sony didn't put a firm date on when some of these devices might come out or what they might be.
--The PlayStation 2 will become the device that Sony will use to take on the Nintendo Wii. Titles like Guitar Hero have sold well with PlayStation 2 and consumers can expect to see more casual games and non-core gamer games coming out, said Kaz Hirai, chief executive of Sony Computer Entertainment, which oversees video consoles.
View complete CES 2008 coverage from CNET.
