‘Corporate birth certificates won’t count for much’

If the “digital world” concept stalls now, Sony is in a lot of trouble. Though much of its business still relies on analog media — the Japanese giant is a significant player in the professional market for television, music and video production equipment, as well as the most recognized name in the world for consumer VCRs, televisions and portable music systems — much of its business is moving to the digital realm.

Sony is already a major component supplier of hard disk drives and chips to computer companies such as Apple. It manufactures and sells its own computers and workstations. It is the largest single manufacturer of compact discs in the world and owns the world market for CD-ROM drives, as well as large stakes in rewritable discs, the MiniDisc and portable. It formed its own Electronic Publishing company long before most big players saw a need to do so. An acknowledged risk taker, Sony is constantly throwing new products — innovative devices such as the Sony Palmtop, an early Japanese version of the “personal digital assistant” — into the market to see what “sticks.”

Under the circumstances, then, it’s not surprising that Ron Sommer, president and CEO of Sony Corp. of America, believes that in five years, “not being at Digital World will be half the fun” — his window to the conference will be HDTV, his link will be a live two-way teleconference and he’ll be able to call up video from previous years for simultaneous display.

Of course, somebody’s got to pay for the development of all that nifty stuff, and thus Sony’s mission, according to Sommer, is “building a digital world and in particular, a digital marketplace for products.”

Easier said than done. But as the lines between the consumer electronics, computer and telecommunications industries disappear, suddenly companies are finding themselves to be not in the businesses they thought they were in. Do they then go out and develop their own expertise in the industries they don’t understand? Do they buy companies or technologies that meet their needs?

Certainly Sony has done both, but today Sommer believes forging alliances with players in other industries is the only way to navigate these treacherous waters. “Corporate birth certificates won’t count for much,” he says. Neither will hit products. Nor will being a leader in the United States in any business.

Instead, as traditional boundaries are erased, application areas take their place. Sony believes niches formerly occupied by the computer business, communications providers and traditional consumer electronics gadgeteers are being replaced by personal entertainment, information and communications products, as well as interactive home information and entertainment systems.

Sony’s work in enhanced personal electronics and in home systems will focus on optical-disc technologies, global-positioning systems and high-quality imaging that, due to the expansive nature of the digital world, will equally benefit business, home, broadcast and computer graphics markets.

SINKING ROOTS, ESTABLISHING ALLIANCES

Those who will be truly successful in the new world, he believes, will be those who have “sunk roots and established alliances” across the entire spectrum of those three industries. No one, he says, holds the trump cards. No one will dominate. The days of being good at just one thing are over. The days of cooperation and versatility have arrived. You cannot do it alone.

And neither, it seems, can you expect to do it right the first time. Trial and error and a “culture of innovation,” says Sommer, will be what moves companies along. It’s sustaining this culture, in supporting diversity and taking risks, where Sommer says the challenge lies — especially in an atmosphere where the “hit product” is the Holy Grail. “We need time for these things to mature,” he said. This attitude is itself refreshingly mature, and one that others might meditate upon.

Denise Caruso