[Cnet]
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.
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.
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.