Posted by: Kenji Hall on November 20
Sony's Kazuo Hirai has a lot of ideas about what he would do if it had an iTunes-like online store. The company wouldn't just sell digital music, movies and books for Sony products, said Hirai, executive vice-president for networked products and services. It would also try to connect users with each other.
Hirai, who unveiled plans for the service--tentatively called Sony Online Service--on Nov. 19, said he hopes for a release next year. "Earlier in the year would be a lot more preferable," he said, during an interview at Sony headquarters in Tokyo.
Since taking over in mid-2006, Sony's CEO and Chairman Howard Stringer has repeatedly said he wants to create a link between the company's electronic products and digital content such as music from Sony's recording label and TV shows and movies from Sony Pictures Entertainment. What's taken so long? "There was always a vision," Hirai said. But before Stringer appointed a new management team and changed the organization chart in February, the company was riven by too many warring factions, he added.
The new online service online is expected to see a gradual rollout to different Sony products. The company plans to have consumers register for the service the moment they pull a TV or music player out of the box. That would lock them in, much like Apple does with its iTunes Store. If done right, the online store concept could also win a following for the brand.
Hirai said Sony would take the iTunes idea a step further: social networking features. So consumers could use their online accounts to save home videos or photos they shot for friends and family to see. "It's not just access content, stream it, and enjoy," he said. "What are your friends watching right now? There's a screen that says all the programming that's available. It highlights all the things that your friends are watching, for example. It's a community experience."
The hope is that all of the online content available would differentiate Sony's products from competitors. "Take LG or Samsung," he said. "They have some great devices. No services."
The store has huge potential to become a fount of cash. Consider the PlayStation Network. The Web-based gateway for PlayStation 3 video game consoles has been Sony's most successful push into online commerce so far. Launched three years ago, the PlayStation Network has 33 million registered users and sells thousands of downloadable games, TV shows, and movies. It has helped win converts inside the company, Hirai said.
Sony expects the PlayStation Network to bring in $500 million in revenues this fiscal year through March 2010--triple last year's total. Add in the new online service and the hundreds of millions of networked products Sony expects to sell, and the company's revenues from downloads and other paid-for services on the PlayStation Network and the new online service could top $3.3 billion by March 2013, Hirai said.
The new online service will be based on the PlayStation Network. Sony will encourage gamers to sign on to the new service by letting them do so through their PlayStation Network accounts.
Continue reading "Sony's Hirai Talks About An i-Tunes-like Store"
Posted by: Bruce Einhorn on November 20
A day after President Obama left Asia after an 8-day visit, Jon Huntsman, the American ambassador in Beijing, tried to counter the spin in the media that his boss's China visit didn't go so well. Speaking at a BusinessWeek conference on Friday morning, the former GOP governor of Utah pointed to agreements between the two countries to promote cooperation on the global economy, climate change and clean energy, and regional security. "Much was accomplished," said Huntsman, who also reminded his listeners that he had been national co-chair of the McCain campaign last year and so was representative of the "bipartisan approach to the U.S.-China relationship."
Huntsman spoke mostly in English but he is fluent in Mandarin and spent a few minutes speaking in Chinese. It was during the Chinese portion of his speech that Huntsman called Sino-U.S. ties "the world's most important relationship." That recalls the famous description that Mike Mansfield, the U.S. ambassador in Tokyo during the 1980s, gave to Japan's relations with the U.S. Back then, Mansfield liked to say "the U.S.-Japan relationship is the "most important bilateral relationship in the world, bar none." Now that honor goes to Japan's giant neighbor. And oddly enough, Mansfield himself, the ultimate booster of Japan-U.S. ties, predicted this would happen. Consider this interview he gave to Japan's Nikkei newspaper ten years ago. Talking about his "bar none" description of ties between Tokyo and Washington, he said "I don’t know how long it’s going to last, though, because you have China on the horizon….China will become more powerful in the decades to come. So far, China has held its head above water better than Japan has and, in doing so, China has become something of a stabilizing factor in East Asia and in the rest of the world….China could be in a position to threaten Japan’s supremacy in Asia. That is the major reason for me to emphasize that it is essential for Japan to rebuild its economy quickly."
Japan didn't change quickly, though. China did. And now it's the U.S. ambassador in Beijing, not Tokyo, who gets to crow about the importance of his job.
Posted by: Bruce Einhorn on November 18
How big of a defeat did Microsoft just suffer in China? Some observers are saying a Chinese court ruling against Microsoft won’t hurt the company, since its piracy-depressed sales in China are tiny. The Beijing court ruled on Monday that Microsoft had violated the intellectual property rights of Zhongyi Electronic, a Chinese company that designs fonts, by including the fonts in many Chinese versions of Windows. Although Microsoft will be able to continue selling Windows Vista and Windows 7, it will have to yank earlier versions of the operating system.
Big deal, says one top tech analyst; there’s so much piracy in China, Microsoft barely sells anything in the country to start with. "The majority of operating systems in the market today are illegal copies, and the ones that are Zhongyi-related have an even smaller share of the market," Reuters quoted Edward Yu, chief executive of a China-focused technology research firm Analysys International, saying about the ruling. "So I don't think it will have much impact on Microsoft's business."
Yu's a smart guy whose firm does a lot of good work. Still, though, how do you measure the damage to the company’s brand and image in China as a result of this ruling? Assume, for the sake of argument, that the court is wrong, Microsoft is right and the company did nothing wrong. It still has suffered a big loss, as the court has muddied the waters: Microsoft more than any other American company has been pushing for China to crack down on software piracy, but now the software giant’s many critics can point to this ruling and say look, Microsoft violates IPR itself. Microsoft will appeal, so there’s a chance a higher court will overturn this ruling. In the meantime, though, Microsoft’s now in a weaker position in its endless fight against piracy in China.
Posted by: Moon Ihlwan on November 17
While other automakers slash output and close production lines, South Korea’s Kia Motors has just opened a $1 billion plant in Georgia. The new factory, part of Kia’s growing presence in the U.S. market, has an annual capacity of 300,000 vehicles. On Nov. 17, it began rolling out the new Sorento sport utility vehicle, which Kia will sell in America from January.
Kia, controlled by Hyundai Motor, Korea’s largest carmaker, is confident it can increase its U.S. sales by double digits next year. The Korean company will offer four new models, including the completely redesigned Optima sedan and the Sportage crossover. “We are prepared to expand,” declares Thomas Oh, executive vice president in charge of Kia’s America business. Oh predicts U.S. sales of 350,000 vehicles next year, up from a projected 300,000 this year.
The optimism stems from the Korean carmaker’s outstanding performance this year. In the first 10 months, when the industry’s sales fell 25% in the U.S., Kia sold 261,000 vehicles there, up 7.2% from a year earlier. Company officials say Kia’s U.S. market share, which rose to 2.1% last year from 1.9% in 2007, is poised to top 3% this year for the first time. Taking advantage of its strong lineup of small cars and a weak Korean currency, Kia has managed to win customers from General Motors, Toyota and Honda. With the Korean won still about 19% weaker against the greenback than it was at the beginning of last year, Kia’s expansion story isn’t likely to end for a while.
Posted by: Bruce Einhorn on November 16
Samsung and LG, the world’s biggest producers of TFT-LCD panels, may finally be getting some more serious competition from Taiwan. The island’s overcrowded LCD industry has just taken one big step toward consolidation, and there may be more moves soon. Over the weekend, Chi Mei Optoelectronics, Taiwan’s second-biggest LCD maker, was acquired by Innolux Display, a smaller rival that’s controlled by outsourcing giant Hon Hai. The combined Chi Mei-Innolux will be the biggest panel maker in Taiwan, jumping ahead of AU Optronics.
Now it’s the turn of AUO (itself the product of an earlier round of consolidation) or the Koreans to make a move. Speculation is focusing on Chunghwa Picture Tube, one of the remaining smaller players in the Taiwanese market; according to this report in the China Economic News, “Samsung is eyeing CPT, one of its suppliers, since it can help the Korean firm penetrate the huge Chinese market, taking advantage of its manufacturing facilities in China and its close link with Chinese brands. Korean makers` interest in Taiwan`s TFT LCD firms was underscored by their courtship for Chi Mei, according to the statement of Shi Wen-long, founder of Chi Mei, during the press conference for the acquisition of Chi Mei by Innolux last Saturday.”
It will be especially interesting to see how AUO responds. I was at the company two weeks ago and interviewed C.T. Liu, chief of the company’s consumer display business. (See my recent BW story on Taiwan's tech sector for more.) He emphasized how AUO was trying to get away from relying on huge, capital-intensive factories. “We used to be a heavily invested in TFT-LCD [production]," he told me. “Now AUO is going in a completely different direction." He summed it up with the acronym SELECT, with each letter standing for a different direction: Solar; Energy service; Lighting; E-paper; Cars; and TFT-LCD.
We’ll now have the chance to see how committed AUO is to this new strategy. Will the company sit back and allow Hon Hai to become tops in Taiwan? Or will AUO try to regain its No. 1 position by going after CPt or another smaller rival? And will AUO be willing to allow Samsung to take over a Taiwanese rival and gain a better foothold in China?
