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New Sony President Takes Consumer-Oriented Approach
Mar 24, 2005
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Sony Corp.'s incoming president has vowed to tackle what he sees as a major gap between the company's electronics products and consumers' needs, but warned that a profit recovery could come later than planned.

Ryoji Chubachi, set to replace Kunitake Ando in June, said it would take some time before reform measures had a significant positive impact on earnings, and admitted it would be difficult to hit its profit target for the 2006-2007 business year.

Mr. Chubachi identified three main weak points in Sony's core electronics business: a decline in product competitiveness, an inefficient manufacturing structure, and a design process that did not place enough emphasis on what the consumer really wants.

"Right now there is a gap between what consumers expect from Sony, their image of the Sony brand, and reality. A recovery will come when we can close that gap," Mr. Chubachi, who will be in charge of the electronics division, said.

In the past few years, Sony, the inventor of the Trinitron TV and the Walkman, has been outfoxed by rivals Sharp Corp. and others in flat TVs and has lost its lead in the portable music industry to Apple Computer and its popular iPod player.

Sony has also been unable to match profit margins earned by Matsushita Electric Industrial and Sharp in hot-selling products such as DVD recorders and liquid crystal display (LCD) televisions because it does not make as many key parts in-house.

Mr. Chubachi said he would create a project team with the purpose of boosting manufacturing efficiency. He also said Sony could develop more attractive products in a more timely fashion by enhancing communication between engineers and marketing staff.
"We need to ensure the wishes of the designer quickly reach the consumer and that feedback from the consumer quickly makes its way back to the design stage," he said. "I want to strengthen the relationship between design, production and sales."

Sony will shift management resources to promising growth areas such as flat-panel TVs, DVD recorders and mobile phones -- targeting products that "allow for the fusion of audio-visual and communication functions," Mr. Chubachi added.

Mr. Chubachi said he would continue to pursue current chief executive Nobuyuki Idei's vision of "convergence" -- creating links between electronics products and content -- although he acknowledged the strategy would not work until the electronics division was healthy again. (Reuters)

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