SONY COMPANY:

Sony Corporation or commonly referred to as Sony, is a Japanese multinational conglomerate

corporation headquarteredin Minato, Tokyo, Japan and the world's fifth largest media
conglomerate with revenue exceeding 7.730.0 trillion, or $77.20 billion U.S. (FY2010).Sony is
one of the leading manufacturers of electronics, products for the consumer and professional
markets.
Sony Corporation is the electronics business unit and the parent company of the Sony Group,
which is engaged in business through its eight operating segments Consumer Products &
Devices (CPD), Networked Products & Services (NPS), B2B & Disc Manufacturing (B2B &
Disc), Pictures, Music, Financial Services, Sony Ericsson and All Other. These make Sony one of
the most comprehensive entertainment companies in the world. Sony's principal business
operations include
1. Sony Corporation (Sony Electronics in the U.S.),
2. Sony Pictures Entertainment,
3. Sony Computer Entertainment,
4. Sony Music Entertainment,
5. Sony Ericsson,
6. & Sony Financial.
As a semiconductor maker, Sony is among the Worldwide Top 20 Semiconductor Sales Leaders.
The Sony Group is primarily focused on the Electronics (such as AV/IT products & components),
Game (such as PlayStation), Entertainment (such as motion pictures and music), and Financial
Services (such as insurance and banking) sectors. Not only do we represent a wide range of
businesses, but we remain globally unique. Our aim is to fully leverage this uniqueness in
aggressively carrying out our convergence strategy so that we can continue to emotionally touch
and excite our customers.
Company Name - Sony Corporation
Founded - May 7, 1946
Founders: Akio Morita and Masaru Ibuka.
Headquarters 1-7-1 Konan, Minato-ku, Tokyo 108-0075, Japan
Representative Corporate Executive Officers

Chairman, CEO and President - Howard Stringer

Vice Chairman - Ryoji Chubachi

Major Products

Audio - Home audio, portable audio, etc.

Video - Video cameras, digital still cameras, and DVD-Video players/recorders, and
Digital-broadcasting receiving systems
Televisions - LCD televisions
Information and communications - PC, printer system, broadcast and professional use
audio/video/monitors and other professional-use equipment
Semiconductors - LCD, CCD and other semiconductors
Electronic components - Optical pickups, batteries, audio/video/data recording media,
and data recording systems
Locations of Major Offices and Research Centers (in Japan) - Tokyo, Kanagawa, Miyagi
Headcount (Consolidated) - 167,900 (as of March 31, 2010)
Consolidated Sales and Operating revenue (2009) - 7,214,000 million yen

Sony Culture:
Sony culture emphasizes "a spirit of freedom and open-mindedness," and a fighting spirit to
innovate. Founder Masaru Ibuka crafted this vision in Sony's Founding Prospectus, and the
philosophy is embedded in our company DNA, embodied in our employees, and seen throughout
our history. Learn more about our spirit, people, and history by following the links.

Sonys Spirit:
Since its founding in 1946, Sony has always sought to create innovative products that inspire
new lifestyles. The Sony founders Ibuka and Morita instilled a spirit of challenge for making
unique products that had not yet existed and a strong will to give happiness and excitement to
people. This is Sony's DNA which still thrives after 60 years. See Ibuka's original vision in
Sony's Founding Prospectus.

Life at Sony:
Sony aims to create a workplace that inspires employees to pursue new challenges and grow by
realizing their creative and innovative potential. Sony also strives to further enhance motivation
and encourage personal growth through on-the-job learning, as well as access to a variety of
programs tailored to different regional needs, including education for next-generation business
leaders, management skill improvement training, and training aimed at enhancing the abilities
and skills of individual employees.

Electronics
(USA)
In the United States, Sony Electronics Inc. (SEL) is actively seeking to create a work
environment conducive to the employment of individuals from varying backgrounds. One such
initiative was the inauguration in October 2005 of eight employee network groups focusing on,
for example, the engagement of women and minorities. To date, this initiative has provided a
forum for more than 1,100 employees to review case studies related to diversity from both inside
and outside the company and to exchange opinions and present proposals. Through the activities
of these groups, participants have sought to provide support for diversity in hiring, establish inhouse employee networks and cross-business employee education opportunities, and bolster
employee motivation and operational productivity. One of these groups, WAVE (Woman of
Action, Vision and Empowerment), introduced a new mentoring program that created a forum
for women to communicate with management and exemplified its focus on the cultivation of
human resources.
Electronics
(Europe)
In Europe, Sony is also actively promoting the careers of female employees through ongoing
efforts to improve employment and work practices. In cooperation with CSR Europe*2, Sony
has set up a working group in which Sony and several other companies analyze current
conditions, examine best practices and discuss measures aimed at increasing the percentage of
women in specialist and management positions. Efforts are also being made to create an
environment that enables women to achieve their potential by providing role models,
establishing an internal mentoring system and revising employment policies.
Pictures
Sony Pictures Entertainment Inc. (SPE) has launched Spectrum, a diversity program involving
not only employees but also customers, local communities and parts suppliers. Spectrum
encompasses Diversity Roundtable Networking Mixers and Employee Business Resource
Groups, two initiatives that support cross-business network building efforts for employees from
various backgrounds. These initiatives also provide opportunities for employees to grow as
professionals, as well as to interact with executives and participate in business strategy
development.
Sonys HR Transformation
Sony Electronics decided to make the leap to an HRO model for its new HRIS system. Three
years ago, Sony Electronics took a hard look at its HR information system and didnt like what it
saw. Only 18 percent of 14,000 employees in six locations consistently used the HR applications,
leaving the HR department knee-deep in paper.
HR undertook an intensive, frank process of internal evaluation, leaving no stone unturned in its
quest to transform HR into a world-class organization and HR specialists into bona fide
corporate strategists. It succeeded on both counts by adopting an HR Outsourcing model.
Back in 2000, Sony Electronics realized its outdated, inflexible HR system no longer met its
needs. The varied applications used across the organization had created inefficiencies and missed
opportunities. HR data often was unreliable or hard to access, limiting the effectiveness of other

technology initiatives. To better manage and reduce the cost of HR service delivery, an HR
Outsourcing model was evaluated as the solution.
After receiving senior-level sponsorship of the outsourcing strategy, Sony HR inked the deal
with Hewitt Associates. Both then moved in parallel paths led by a joint steering committee,
which Cotter and Laspisa headed.
Once a framework for the HR Outsourcing structure was hammered together, senior HR staff at
each of Sony Electronics seven locations reviewed and validated it. A change management team
was assembled to analyze employee and manager work processes and behaviors to determine
how these would change. The team also addressed Web access, security, and privacy issues.
Finally, a major communications and training effort was launched to get everyone attuned to the
new system. The planned kickoff for the endeavor was Sept. 11, 2001. Due to the tragic events
that ensued that day, the kickoff was postponed until the next day
This April, Sony and Hewitt will introduce an expanded compensation administration system on
HR Work Ways that includes annual salary planning and administration, incentive compensation,
unplanned pay changes, special cash awards, and additional analytics.
The portal also will be expanded to accommodate recruiting and deployment needs, providing
services for job postings, applicant tracking, and employee orientation, transfers, and exits.
Sony Corporation Announces New Management Structure
Sony Corporation's current management team today proposed the creation of a new management
structure designed to expand upon its core strengths as a global electronics, entertainment and
technology company. The proposal was approved at the Board of Directors' Meeting held today.
Effective June 22, subject to approval at Sony Corporation's Ordinary General Shareholder's
Cultural Challenges faced by Sony
Sony culture emphasizes "a spirit of freedom and open-mindedness," and a fighting spirit to
innovate. Founder Masaru Ibuka crafted this vision in Sony's Founding Prospectus, and the
philosophy is embedded in our company DNA, embodied in our employees, and seen throughout
our history
Sony use different languages to script their sites. They have translated their websites in many
languages.
Sony employs 167,900 people worldwide.
Workforce Diversity is one of the challenges faced by the company. Even Marketing and catering
the product to different markets and after sales service are the challenges the company needs to
work upon.
Sony has an ongoing talent development initiative. In 2008, the company created 13 global talent
directors who are assigned to identify promising individuals in all businesses and regions and
develop them into future business leaders. This initiative also includes a job rotation project with

individuals moving through a schedule of job assignments designed to give them exposure to a
variety of businesses and regions.
New products launched by Sony
1. Sony India to launch 10 new LED TV models
Consumer electronics major Sony has lined up a string of launches in the LED television
segment in India this year, even as it is preparing a new marketing initiative that aims at
capturing a 30 per cent market share in the LCD segment by 2010-end.company will be
launching 10 new products in the LED segment from June this year. Sony is betting big on the
3D enabled TV that will be launched across all its markets, including India, from June. It will
simultaneously launch some software products to support the 3D TVs.As part of its plans to
strengthen its brand image, the company will be investing Rs 140 crore in 2010 for a new
marketing campaign that will cover the print and electronic media, online and outdoor platforms.
It also plans to double its outlets from the present 2,500 this year.
2. HD camera
The SNC-CH240 Full HD Fixed camera was launched at Sony's Power of Images (POI) event in
Germany, completing its HD range. IFSEC heralded the European launch of two new HD
cameras. The SNC-DH180 and SNC-DH240 were unveiled for the first time at ISC West in the
US in March and will be on show for the first time in Europe at IFSEC 2010. Focused on image
quality, the SNC-DH180 boasts a built-in infrared (IR) illuminator to deliver excellent images
even in absolute darkness, while the SNC-DH240 is equipped with various different image
enhancers including View-DR.
3. Laptop with new Transfer Jet
Sony will launch the first laptop containing the new Transfer Jet short-range wireless system on
Saturday. Sony hopes Transfer Jet will replace cables for shifting data between gadgets, but the
technology's success will depend on its use in products from the big-name consumer electronics
companies that have pledged to support it.
4. Sony to launch new e-reader in Japan
Sony has partnered with three local companies including mobile phone carrier KDDI Corp,
Toppan Printing Co. and Asahi Shimbun, a major newspaper in Japan, to establish an e-book
distribution company.
5. Sony Unveils Its Answer to Apple's iTunes
Sony (SNE) is taking a page from Apple's playbook .On Nov. 19, Sony said it plans to launch an
online store selling music, movies, and books as well as other downloadable applications for
mobile products. Sony's top executives didn't specify when the Internet store, tentatively called
Sony Online Service would go live or what it would look like. But the online storefront
announced at a management strategy meeting in Tokyo, is likely to bear some similarities to

Apple's iTunes store and would be Sony's most ambitious attempt to link its products to its own
vast library of digital content.

Completely new lineup of BRAVIA LCD televisions with LED backlight technology
and our new Monolithic Design is a clear example of how Sony will continue to own the living
room by creating products that deliver on Sonys promise of exceptional TV quality and
performance-a promise that continues with the upcoming launch of 3D televisions.
VAIO PCs continue to impress with their strong combination of innovation,
entertainment and elegant design. One particularly exciting model in the lineup is the Z series.
Weighing in at just three pounds and featuring cutting-edge graphics, it is a wonderful example
of our ultra-mobile engineering expertise.
Sony Ericsson introduced the Xperia X10-a feature-rich Smartphone built on a new
open platform-and is currently rolling it out globally. In addition to rich graphics and a large
touchscreen display, the Xperia X10 also features applications to intelligently manage both
communications and media from multiple sources.
Cinemas around the world are starting to deploy digital projectors, which allow content to
be projected at substantially higher image quality than existing projectors. The 4K digital cinema
projector system already commercialized by Sony is designed for easy conversion to 3D
projection, and the two largest theater chains in the United States have signed on to deploy our
systems across their circuits of more than 11,000 screens, representing an important step for this
growth business.
Sony/ATV Music Publishing, for the first time in the Companys history, was named
ASCAP Pop Publisher of the Year-the industrys highest honor. Sony/ATV continues to be
tremendously innovative in licensing the songs in its catalog, and with the years biggest
international country and pop sensations-Taylor Swift and Lady Gaga-signed to Sony/ATV, there
is a lot to be excited about.
6.
Televisions
The Company is targeting profitability in LCD TVs in fiscal year 2010. In addition, this autumn
we will launch the Sony Internet TV. Developed in collaboration with Google, Sony Internet TV
is an exciting new generation of television that not only offers new forms of enjoyment through
unprecedented Internet integration, but is also able to evolve through the download of
applications. We are also developing the next generation of TV display, and over the medium
term
are
targeting
a
20%
market
share.
7.
Game
The PlayStation3 platform has been gaining momentum since the launch of the slimmer, lighter
and attractively priced PS3 last year. PlayStationMove features a new motion controller that,
when combined with the PlayStationEye camera, can very precisely track users movements to
add a new dimension to PS3 games. Additionally, as a core aspect of Sonys Groupwide
launch of 3D products, we have commenced the era of 3D gaming by enabling all existing
PS3s to be upgraded to 3D-compatibility with a free firmware download, and will release our
own 3D game titles and continue to actively support the development of 3D games by third-party
software developers.

Sonys restructuring news this morning came with a change in direction. Sonys corporate moniker had been
Sony.Make.Believe, but today showed Sony will change. Our point is simple: Sony must change. Our note
looks at the late timing of the news, surprising news from the restructuring, and where there might be hope for
Sony to focus its change in corporate strategy.
1. Why is Sonys restructuring late?
Sir Howard Stringer was brought into Sony to help re-set the direction for Sony as a company, and the result is
that he presided over what will likely be some of the darkest times in Sonys long history. His challenge was to
effect change to the corporate culture of Sony, and it can be said that he put it in motion. But now, in the
opening days of Kaz Hirais leadership, he must be the one to announce layoffs of approximately 10,000
employees.
From our perspective, this is late and long overdue, and likely not enough. It was evident two years ago when
Sony backed off of investing in the Sakai TV manufacturing plant that its TV business was in trouble, and highly
challenged. The TV division, once a cornerstone of the company and technology gem, has lost money for eight
consecutive years. Would this continued series of losses over eight years ever be tolerated in a company in the
United States? In our opinion, the answer is simple: no way.
Is the restructuring even big enough? Typically, most big restructurings are never enough, and there is typically
another one after the first one.
From a corporate cultural standpoint, though, it is worth noting Tokyo vs. the Silicon Valley. If you live and work
in the Valley, the concept of a layoff is understood, and can happen on any given day given the tech industry. In
Tokyo, a job with a corporation such as Sony was historically a job for life, and became part of an employees
personal identity. As a result, layoffs in Tokyo are horrifying and culturally shocking, and may influence the
timing and sizing of tough corporate decisions.
2. Why is Sonys restructuring surprising?
While the TV division changes are overdue from our perspective, we remain surprised at some curious choices
in their strategy. While the goals of lowering fixed costs and operating costs (fewer models) are laudable,
Sonys approach to being more competitive with its products are to feature Sony-unique features. Really?
So what is a Sony-unique feature according to todays presentation? OLED. While they get credit for not
claiming 3D-TV technology as being unique, Sony, from our vantage, has little edge on OLED when compared
to companies such as Samsung and LG. Both Korean companies have a) booming market share in most global
markets outside of Japan, b) significant R&D budgets, c) the opportunity to turn their focus from creaming the
Japanese TV companies in LED-LCD TVs to OLED technology, and d) Won to Yen favorable winds.

Further, Sony is preaching about Sony services, such as Sony-driven music or movie content. While we believe
that vertically integrated approaches are an option, our perspective is that consumers want choice, and not just
Sony-driven content. Further, the bigger issue to us is that Sonys historical corporate strengths havent
included either networking or user interface (UI).
The PlayStation Network has been a series of painful mis-steps (example: losing customer data), but Sony has
soldiered on trying to improve its network. On the UI front, their pain is not uniquemost companies outside of
one notable leader (Apple), have not managed to create the special sauce of UI. Certain U.S.-based software
companies such as Amazon, Google and Microsoft, have been closer to creating effective UIs, but there have
been far and few examples from any of the Japanese consumer electronics companies such as Sony.
3. Where could there be hope for Sony?
Corporate cultural change is painful and slow, and Sony is no exception. The details emerging from Sony today
about its restructuring is a painful and sobering reminder to its employees that the tough times are still ahead,
and it is time again, to refocus. So from our perspective, where is the hope for Sony?
Restructuring means not only laying off employees, reducing fixed and operating costs, but also to invest in
corporate strengths as well as to seek out new ones. To us, Sony must act boldly and bravely to avoid more
painful restructuring/layoff news such as today.
With the corporate culture changes already underway, we believe Sony should strongly consider more
partnerships, and not just in the energy space (as noted in the presentation). While Sony seems somewhat
secure in its TV and gaming strategies, we offer a few alternatives that would be considered bold, landscapechanging, and offer a brighter potential future for Sony.
1. Partner with Amazon on the services front for TVs, tablets, e-readers, and bring Amazon a phone
solution.
Why it would workFrom a Powerpoint-slide-deck perspective, we believe the synergies (no, that word didnt
die in 2001) are apparent. Sony could help propagate its hardware with Amazon content and services, including
the payment systems, and Amazon could get a premier hardware partner beyond its Kindle (Android) designs.
While Amazon enjoys being a low-priced alternative to the iPad, Sony could provide some pricing stratification.
On the TV front, it seems brain-dead-obvious to us that Amazon needs to get into the living room and onto the
TV to extend its reach. It is currently the leader for purchases on the PC/laptop platform, is extending its reach
for mobile purchases on phones/tablets, and the battle to control the magical Buy button on TVs is coming
next. Amazon has the infrastructure in place already (they have your credit card), and need TV partners to
make that next platform viable. Sony, too, could use a boost for its TV offerings.
Why it would fail/never happenWe turn to Sam, talking to Frodo in from the Lord of the Rings movieIf I take
one more step, itll be the farthest away from The Shire Ive ever been. Sony has been basing its strategy on
being vertically integrated in owning content, hardware, software and services. We believe however, that the

strategy was wildly appropriate for an analog world. 2012 is a digital world, with digital consumers, with digital
needs, and access is key. Vertical integration is limited, and misses the mark on consumer needs.
Yes, both companies already have services and integrate services/hardware, so redundancy could be an issue.
2. Partner with Microsoft for a next-gen console(s) and tablet/mobile solutions.
Why it would workMicrosoft could use the help on hardware and content, and Sony could use the help on
network and social/mobile. Would Move and Kinect technology be redundant? Maybe, or be a killer combo.
Further, if your assumption is that the overall market for console-driven revenue (from selling software and
services, not hardware) is under threat to be smaller in the next hardware console cycle due to the explosion of
social/mobile gaming, then partnering on the console front could make sense. Why divide and conquer a
smaller pool, when you could strengthen and fortify, and use the combined strengths to then attack the
social/mobile front?
Sony could become a proponent for Windows 8 and Windows Mobile, and help provide software technology to
prop up Sonys flagging mobile business. Microsoft could use the help with mobile beyond Nokia.
Why it would fail/never happenThere are probably several reasons why not, but one is that Sony could be
more likely to partner with Gree, Mixi or DeNA for social/mobile content/services solutions. However, Microsoft
has the potential to drive market share gains over the next 24 months on the tablet front due to Windows 8. A
Gree/Mixi/DeNA solution for Sony would likely be Japan-focused, and not help Sony on a global basis at this
point.
3. Partner with Nintendo in the handheld, mobile and tablets space.
Why it would workNintendo clearly has content that is unique, beloved, and timeless. Sony has hardware and
distribution. On a Powerpoint slide, this is a great combination. Putting Nintendo content on Sony phones
would be a huge positive for Sony, and Nintendo could likely redesign content once for mobile/tablet, and
distribute many times. On the handheld space, Sony could provide Nintendo with a spectacular screen (PS
Vita), and a great combo that would warmly received in at least Japan.
Why it would fail/never happenFrom a corporate mantra perspective, Nintendo is guided by a) honoring the
customer, and not charging a high price for any piece of hardware, and b) Nintendo is guided by being breakeven within a relatively short time frame after launching a new piece of hardware. Sony, however, is not afraid
to adopt a razor/razor blade model (see: launching the PS3 and its price point vs. how much Sony lost on
hardware sales) for hardware launches, albeit at higher price points.
Further, neither have extensive network expertise, but the content may be a bigger driver to join forces.
One other thing: The Yen will help. While Sony has had a tough stretch of macro-issues such as the
earthquake and tsunami, the strengthening of the Yen over the past two years has helped crush profitability as

an exporter. As the Yen weakens against, say, the U.S. Dollar (now 80.850 up from the mid-70s), will give Sony
a lift it hasnt had in several quarters. At this point, momentum is momentum for Sony, no matter where its
from.
Sonys restructuring news this morning came with a change in direction. Sonys corporate moniker had been
Sony.Make.Believe, but today showed Sony will change. Our point is simple: Sony must change. Our note
looks at the late timing of the news, surprising news from the restructuring, and where there might be hope for
Sony to focus its change in corporate strategy.
1. Why is Sonys restructuring late?
Sir Howard Stringer was brought into Sony to help re-set the direction for Sony as a company, and the result is
that he presided over what will likely be some of the darkest times in Sonys long history. His challenge was to
effect change to the corporate culture of Sony, and it can be said that he put it in motion. But now, in the
opening days of Kaz Hirais leadership, he must be the one to announce layoffs of approximately 10,000
employees.
From our perspective, this is late and long overdue, and likely not enough. It was evident two years ago when
Sony backed off of investing in the Sakai TV manufacturing plant that its TV business was in trouble, and highly
challenged. The TV division, once a cornerstone of the company and technology gem, has lost money for eight
consecutive years. Would this continued series of losses over eight years ever be tolerated in a company in the
United States? In our opinion, the answer is simple: no way.
Is the restructuring even big enough? Typically, most big restructurings are never enough, and there is typically
another one after the first one.
From a corporate cultural standpoint, though, it is worth noting Tokyo vs. the Silicon Valley. If you live and work
in the Valley, the concept of a layoff is understood, and can happen on any given day given the tech industry. In
Tokyo, a job with a corporation such as Sony was historically a job for life, and became part of an employees
personal identity. As a result, layoffs in Tokyo are horrifying and culturally shocking, and may influence the
timing and sizing of tough corporate decisions.
2. Why is Sonys restructuring surprising?
While the TV division changes are overdue from our perspective, we remain surprised at some curious choices
in their strategy. While the goals of lowering fixed costs and operating costs (fewer models) are laudable,
Sonys approach to being more competitive with its products are to feature Sony-unique features. Really?
So what is a Sony-unique feature according to todays presentation? OLED. While they get credit for not
claiming 3D-TV technology as being unique, Sony, from our vantage, has little edge on OLED when compared
to companies such as Samsung and LG. Both Korean companies have a) booming market share in most global
markets outside of Japan, b) significant R&D budgets, c) the opportunity to turn their focus from creaming the
Japanese TV companies in LED-LCD TVs to OLED technology, and d) Won to Yen favorable winds.

Further, Sony is preaching about Sony services, such as Sony-driven music or movie content. While we believe
that vertically integrated approaches are an option, our perspective is that consumers want choice, and not just
Sony-driven content. Further, the bigger issue to us is that Sonys historical corporate strengths havent
included either networking or user interface (UI).
The PlayStation Network has been a series of painful mis-steps (example: losing customer data), but Sony has
soldiered on trying to improve its network. On the UI front, their pain is not uniquemost companies outside of
one notable leader (Apple), have not managed to create the special sauce of UI. Certain U.S.-based software
companies such as Amazon, Google and Microsoft, have been closer to creating effective UIs, but there have
been far and few examples from any of the Japanese consumer electronics companies such as Sony.
3. Where could there be hope for Sony?
Corporate cultural change is painful and slow, and Sony is no exception. The details emerging from Sony today
about its restructuring is a painful and sobering reminder to its employees that the tough times are still ahead,
and it is time again, to refocus. So from our perspective, where is the hope for Sony?
Restructuring means not only laying off employees, reducing fixed and operating costs, but also to invest in
corporate strengths as well as to seek out new ones. To us, Sony must act boldly and bravely to avoid more
painful restructuring/layoff news such as today.
With the corporate culture changes already underway, we believe Sony should strongly consider more
partnerships, and not just in the energy space (as noted in the presentation). While Sony seems somewhat
secure in its TV and gaming strategies, we offer a few alternatives that would be considered bold, landscapechanging, and offer a brighter potential future for Sony.
1. Partner with Amazon on the services front for TVs, tablets, e-readers, and bring Amazon a phone
solution.
Why it would workFrom a Powerpoint-slide-deck perspective, we believe the synergies (no, that word didnt
die in 2001) are apparent. Sony could help propagate its hardware with Amazon content and services, including
the payment systems, and Amazon could get a premier hardware partner beyond its Kindle (Android) designs.
While Amazon enjoys being a low-priced alternative to the iPad, Sony could provide some pricing stratification.
On the TV front, it seems brain-dead-obvious to us that Amazon needs to get into the living room and onto the
TV to extend its reach. It is currently the leader for purchases on the PC/laptop platform, is extending its reach
for mobile purchases on phones/tablets, and the battle to control the magical Buy button on TVs is coming
next. Amazon has the infrastructure in place already (they have your credit card), and need TV partners to
make that next platform viable. Sony, too, could use a boost for its TV offerings.
Why it would fail/never happenWe turn to Sam, talking to Frodo in from the Lord of the Rings movieIf I take
one more step, itll be the farthest away from The Shire Ive ever been. Sony has been basing its strategy on
being vertically integrated in owning content, hardware, software and services. We believe however, that the

strategy was wildly appropriate for an analog world. 2012 is a digital world, with digital consumers, with digital
needs, and access is key. Vertical integration is limited, and misses the mark on consumer needs.
Yes, both companies already have services and integrate services/hardware, so redundancy could be an issue.
2. Partner with Microsoft for a next-gen console(s) and tablet/mobile solutions.
Why it would workMicrosoft could use the help on hardware and content, and Sony could use the help on
network and social/mobile. Would Move and Kinect technology be redundant? Maybe, or be a killer combo.
Further, if your assumption is that the overall market for console-driven revenue (from selling software and
services, not hardware) is under threat to be smaller in the next hardware console cycle due to the explosion of
social/mobile gaming, then partnering on the console front could make sense. Why divide and conquer a
smaller pool, when you could strengthen and fortify, and use the combined strengths to then attack the
social/mobile front?
Sony could become a proponent for Windows 8 and Windows Mobile, and help provide software technology to
prop up Sonys flagging mobile business. Microsoft could use the help with mobile beyond Nokia.
Why it would fail/never happenThere are probably several reasons why not, but one is that Sony could be
more likely to partner with Gree, Mixi or DeNA for social/mobile content/services solutions. However, Microsoft
has the potential to drive market share gains over the next 24 months on the tablet front due to Windows 8. A
Gree/Mixi/DeNA solution for Sony would likely be Japan-focused, and not help Sony on a global basis at this
point.
3. Partner with Nintendo in the handheld, mobile and tablets space.
Why it would workNintendo clearly has content that is unique, beloved, and timeless. Sony has hardware and
distribution. On a Powerpoint slide, this is a great combination. Putting Nintendo content on Sony phones
would be a huge positive for Sony, and Nintendo could likely redesign content once for mobile/tablet, and
distribute many times. On the handheld space, Sony could provide Nintendo with a spectacular screen (PS
Vita), and a great combo that would warmly received in at least Japan.
Why it would fail/never happenFrom a corporate mantra perspective, Nintendo is guided by a) honoring the
customer, and not charging a high price for any piece of hardware, and b) Nintendo is guided by being breakeven within a relatively short time frame after launching a new piece of hardware. Sony, however, is not afraid
to adopt a razor/razor blade model (see: launching the PS3 and its price point vs. how much Sony lost on
hardware sales) for hardware launches, albeit at higher price points.
Further, neither have extensive network expertise, but the content may be a bigger driver to join forces.
One other thing: The Yen will help. While Sony has had a tough stretch of macro-issues such as the
earthquake and tsunami, the strengthening of the Yen over the past two years has helped crush profitability as

an exporter. As the Yen weakens against, say, the U.S. Dollar (now 80.850 up from the mid-70s), will give Sony
a lift it hasnt had in several quarters. At this point, momentum is momentum for Sony, no matter where its
from.