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Back in the heyday.
"IT'S A SONY"

Sony doesn’t want to compete on price, so it’s going back to its premium roots

By Mike Murphy

It’s a Sony.”

In the postwar era, Sony was a pioneer. The Japanese electronics giant was known for its quality, innovative products, and sturdy design. It had a long history of firsts, including the first portable cassette player, the iconic Walkman, in 1979, the first commercial CD player in 1982, the MiniDisc in 1992, and the Blu-Ray recorder in 2003.

In the 1980s, and for much of the 1990s, Sony was a consumer-electronics powerhouse. But with the rise of Apple as a gadget company in the 2000s, the  emergence of smartphone as do-all devices, and the commoditization of much of the rest of Sony’s electronics businesses by competing companies from across Asia, the company’s standing in the consumer electronics market waned. Since its heyday, the company has descended into releasing a string of me-too products, with much of its revenue coming from its PlayStation gaming division, and component sales to other companies.

Once the dominant force in televisions, Sony’s position faltered in recent years. But fortunes seem to be swinging back Sony’s way, with the company’s market share jumping in 2017, and at this year’s CES gadget show, Sony showed off a litany of new or updated products, from the latest in TV tech to a refreshed robot companion. Quartz caught up with Sony Electronics’ US president and chief operating officer, Michael Fasulo, to talk about the company’s strategy, and how it plans to return to its roots as a premium manufacturer in a crowded marketplace.

This interview has been lightly edited for clarity and length. 

What is Sony’s focus at the show this year? Is there one theme that everything’s revolving around, or anything you’re pushing in particular?

Yes and yes. The theme would be around innovation, and clearly our obsession with quality. The product front is pretty diverse and pretty broad. From a consumer electronics perspective, using our proprietary technology to make our televisions have the absolute best viewing experience available. General consumers aren’t really interested in what the technology is, but what the result of that technology is.

What’s new with your televisions?

We’ve been able to develop a processing engine that can not only take a 4K upscaled input and make it look lifelike, now with HDR—high dynamic range—and the color palette that we now deliver to televisions, it is truly perfection on detail. Here, we’re expending our reach with more bigger-screen televisions. Whether it’s OLED or LCD, we believe that it’s a choice, so if customers feel they want deeper blacks and picture quality, then OLED is probably the place for them, but if they want stunning, intensive, bright details, then maybe it’s LCD. I always say: Let your eyes decide. Take a look, get an experience, and whatever you find most enjoyable is what you should purchase.

With the technology that goes behind that is critically important, especially as we get to the bigger size [TVs]. So in LCD, we start at 49 inches, up to 75 inches, and we’ll also offer an 85 inch. It’s amazing that while the sizes now are very large, because of the form factor, the borderless panels, the thinness, it really isn’t an overwhelming experience at all. It’s actually very comfortable. But, from a picture quality point of view, it requires more processing.

What’re your thoughts on the TV market in the US right now, especially being a premium manufacturer when there’s been a race to the bottom in price?

Frankly, that’s where we play. Consumers tell us that. It’s a good place to be, we enjoy it, and we do well in it. This is going to be a great year. I think it’s going to be an interesting year in the unit space, but by a per-dollar basis, it’s going to be better. Because it’s a value proposition [for us]. Not only 4K HDR, which consumers have fallen in love with, but also when you look at additional features: number one, the elegance of our designs is stunning. They’re in the primary room in your home, so simplicity and elegance matters.

There’s also our added value in smart home and automation, and what you can do with our televisions that are based on Android. With the Android platform, right through the remote in your hand, from the comfort of your easy chair, you can command the TV to do various things around the house and outside the home: If you want to get a pizza delivered you can do that as well. It’s really exciting, and why I think it’s going to be a good year in the premium TV space.

AP Photo/Katsumi Kasahara
Sony’s first CD player, released in 1982, cost $700 at the time.

How does the company’s past play into this?

Again, we’re obsessed with quality and innovation, and with the quality of our televisions, we want equally for sound. We come at that a number of different ways, because really, we’re an audio company, our heritage is audio. We own a music company, and a motion picture company, so we understand the quality of audio for movie watching, for music listening, et cetera. On OLED [TVs], we emit sound directly though the panel, no speakers required. The vibration of the panel is front-firing, and can give an immersive experience.

We also work with folks like Dolby (Dolby Vision in our TVs, Atmos in our sound bars) to get that full immersive visual and audio experience. We actually had the best-selling sound bar over $499 last year. When we look at the home entertainment space, it’s really about sight and sound, visual working with audio.

One thing I’d really like to know more about is the recently re-launched Aibo robot dog. Why now? What’s changed since it was last on the market a decade ago? 

When we launched it initially, robotics was still—I guess I could say—emerging. To some degree, [Aibo] was ahead of its time. But now, one of the core technologies that we have is image sensors. Their ability, coupled with some other proprietary technologies are doing deep learning. So really it’s taking artificial intelligence and robotics, and marrying them together, which is a technological feat.

Aibo comes with a personality. I’ve been walking the [show] floor, looking at a number of different ideas of robots, and I haven’t come across any as cute or as compassionate, or interactive and personal as Aibo.

Aibo will learn you. It’ll learn your habits, it’ll learn your voice, the intonation of your voice, and react accordingly. Aibo also expects compassion from you, so when Aibo is getting tired and needs a nap (a recharge), she’ll get on her hind legs and beg for food (energy). If you misplace your smartphone, Aibo will fetch it and start barking for you.

So it’s really a companion that’s really a technological feat in deep learning, but also compassion. It’ll play with Stella, my real dog, they love each other.

Does this speak to something more about Sony’s direction than a toy pet?

If you look at the broader strategy that’s coming to life in Aibo, there’s some really core technologies that Sony’s built up over the years. We’ve been doing this for more than seven decades. A lot of cumulative learning, and we have some of the best engineers on the planet.

We’re taking core technologies like image sensors, and applying them to different applications. The obvious one is cameras, and if you look into the industry, we’re doing quite well in cameras.

But if you take that same technology—we have low-light technology, face-detection technology, our high dynamic range technology, all surrounding the image sensor—and let’s apply to, let’s say, autonomous driving. We announced at this show the concept of the “safety cocoon.” What does that mean? Image sensors can see a lot more than our eyes can. If we look at the placement of image sensors inside and out of an automobile, think about seeing far in front of you, farther than the eye can—so we’re anticipating what’s coming. We can see behind you, and around you. And that’s where the cocoon concept comes in, that we can predict what’s going to happen. So you’re driving along the road and there’s a car coming up a side street, a sensor can predict far before you see or hear it, and if there’s no slow down in that oncoming automobile, it starts to protect you, and slows you down, and move you out of the way of an oncoming vehicle.

Think of how difficult it is to drive in sunlight—a sensor doesn’t have that issue. It can adjust for light. One of the most challenging things for real drivers is going from sunlight into darkness—think of a tunnel—your eyes have to adjust, but also your depth perception. With low-light processing, we could detect in almost pitch black where an object or vehicle is. It’s a cool, but serious, application. We’re working with companies like Nvidia, Bosch, and several leading car companies on the applications.

Our core technologies are remarkable in home electronics, in consumer electronics, but also in business-to-business and upcoming industries.

So is that Sony’s strategy for the future then, being a parts supplier as much as a consumer electronics brand, or will one part win out?

First and foremost we want to make sure our branded products are the latest and the greatest, and the most innovative, as again, quality matters. But as we expand those technologies and advance them, applying them to other areas or business pain points is a value that we can provide very well.

[One example is] drones. We’re in the drone business, not on the consumer side, but on the [business-to-business], agricultural side, looking at terrains, at massive construction projects, weather, climate differences over vast geographies.

So where does PlayStation and VR fit into Sony’s strategy moving forward?

Perfectly. Last night we announced that PlayStation 4 over the holidays sold over 5 million units, bringing the total installed base of the platform to 73.6 million units. Which is quite remarkable, considering it’s our fourth generation. On the PlayStation Network side, we’ve got more than 70 million active monthly users. So it’s a very solid, healthy, growing business.

When you compare all the consumer products that Sony produces today compared to the other large companies—Samsung, LG—what do you see as the areas you’re currently winning in, and ones you have ground to make up?

I really try not to make comparisons. Obviously you need to know your competitors. But what we’re really focused on is end-user pain points, and how we overcome those pain points in the areas that we have those capabilities. First and foremost, we’re going to be true to the brand, standing for quality and innovation.

If we can get an emotion out of our customers, then the brand has made contact with them, making a difference. We call it the “last inch”—the closer we can get to you and your expectations, then the more of a relationship we’ll have between the two of us, the brand and the end-user.

And I think that’s where we’re winning, and we’ll continue to win, as long as we stay laser-focused on that approach.

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