In late March of 2003, Hideki "Dick" Komiyama took over as president and chief operating officer of United States-based Sony Electronics. A month later, its Tokyo-based parent company reported a loss of about $1bn (£0.55bn).
If that weren't enough, Gateway, Hewlett-Packard and Dell soon announced plans to enter the consumer-electronics market, adding to the list of Sony's competitors, which already included long-term rivals LG Electronics and Samsung Electronics.
All this came as the electronics division, the company's largest contributor to revenue, was limping, due to softness in two of the stronger categories in its portfolio: cathode ray tube televisions and Vaio PCs. Sony Electronics' management realised that the consumer-electronics business was changing and that it would have to change quickly in order to protect its turf.
"Five or six years ago, it was a peaceful marketplace," Komiyama said. "Now, people from the outside are coming in like hunting tribes."
The division has since spun off a music download service and pushed further into new product categories, such as liquid crystal display televisions and DVD recorders.
There are signs that the changes are having an impact. Sony Electronics achieved double-digit growth in virtually every consumer product category leading up to the important holiday buying season. Komiyama recently discussed his expectations for the consumer-electronics business and the shift at Sony with CNET News.com.
What are some of the product categories you think will be a hit with consumers in the coming year?
Flat panels will be big, especially as high-definition television begins to grow. The display business in general will be very significant to us. Secondly, DVD players with hard-disk recorders will be big, as will Blu-ray. Digital cameras will continue to evolve. Portable music players with Hi-MD features and hard-disk drives will be an interesting business opportunity. Home theatre environments will also be an opportunity.
The life cycle of consumer electronics products is shorter than ever. Why is that happening?
Technology is changing and evolving more quickly than ever, and consumers are more demanding in terms of wanting devices that use new technologies and have the latest features. This means that we have no choice but to use new technologies to appeal to consumers. We're seeing this more and more, as consumer electronics companies are gradually shifting emphasis from audio and video technologies to information technology, and this is definitely the way we have to move in order to stay ahead.
