Not only is Apple Computer Inc.'s success with its iPod helping to buoy the fortunes of the computer maker, but the company's track record has helped breathe new life into the U.S. consumer electronics industry as well, which has long trailed powerhouses in Japan.
The Wall Street Journal today has a front-page article on how U.S. electronics companies are making greater strides against their Asian competitors: "For 40 years, Japan ruled the lucrative business of consumer electronics. Its manufacturing wizards -- Sony, Panasonic, Pioneer -- designed the world's hottest televisions, stereos and cameras. In the U.S., once-proud names such as Admiral, Magnavox and RCA were sold or went under. Now the momentum has shifted, and it is American companies that have some of the best-selling gadgets in the U.S. -- among them Apple Computer Inc.'s iPod digital-music player, Eastman Kodak Co.'s EasyShare digital cameras and palmOne Inc.'s Treo mobile-phone and e-mail device," the paper wrote. "The Americans' edge comes from their skill at writing software for new digital chips and from low manufacturing costs. While many Japanese companies spent years debating the merits of outsourcing versus keeping production in-house, U.S. companies have been quick to strike deals with contract manufacturers in China and elsewhere."
More from the article: "The latest sign of the U.S. resurgence came Monday when Sony Corp. named the head of its U.S. operations, Welsh-born American Howard Stringer, as chief executive of the whole company. Mr. Stringer's top priority is to reverse Sony's loss of market share to companies such as Apple, Kodak and Microsoft Corp. Microsoft's Xbox game machine saw sales rise 27% last year and is stealing customers from the Sony PlayStation and Nintendo Co.'s GameCube. What's happening in consumer electronics is the same phenomenon bringing upheaval to television, music and other media industries: The long-awaited conversion of pictures and sound into digital data is shattering old business models and opening the way for new competitors."
Eli Noam writes in The Financial Times today about the overall states of affairs for consumer electronics companies, and doesn't give it a glowing review. "In the last few days, the CEOs of the consumer electronics giants Sony and Toshiba were both replaced. Even more unusually, Sony promoted the distinctly un-Japanese Sir Howard Stringer to the top job. Also recently, Fujitsu and NEC scaled back their consumer electronics operations.
"What is going on here? Beyond the specifics of each company, the industry as a whole has been under pressure for a while. And this happened, ironically, despite its enormous innovativeness. For years, electronic consumer devices have been getting small, faster, and smarter. But they were also getting cheaper under fierce competition from low-cost countries and convergent electronics industries. Meanwhile, R&D and marketing costs grew while consumer adoption fell behind product innovation. Today, one can buy a decent DVD player, VCR, or a conventional TV set for around $50. Consumer electronics have become the last great bargain. Even the pricey large screen flat TVs have been dropping rapidly in price. These great consumer deals have depressed industry profitability," the columnist said. "We are moving to an electronic home that is internetworked, interconnected, and interoperating. This will be a boon for consumers. They will keep getting more for less. But will it help the consumer electronics industry? After an initial excitement, home networks will only accelerate its problems. We must recognise that as one connects in new ways, one also disconnects some of the old ways. As we interconnect the multiple devices in the home, we also enable their physical separation from the home. And this is bad news for the traditional ways of the consumer electronics industry, whoever the CEO might be who occupies the hot seat."
Stringer's future at the helm of Sony – a historic moment, since he is the first non-Japanese to lead the company – is a popular topic in the business press. (Stringer, by the way, is the former CBS News president and was a featured observer/interviewee on last night's farewell for CBS anchor Dan Rather).
From The New York Times, in a piece picked up by its sister publication, The International Herald Tribune: "Less than a decade later, Samsung has twice the market capitalization of Sony, which this week named Stringer as its new chairman. Nor is Samsung Sony's only rival. Apple Computer now dominates the market for portable music players. Silicon Valley companies have led the way in digital gadgets like the PalmOne personal organizers and TiVo's digital video recorders. Sony is even facing strong competition from Eastman Kodak and Canon for digital cameras, a product category it invented. Samsung has become what Sony could once claim - the competitor with both the breadth of products and the appeal of a premium brand. This rapid reversal of fortunes illustrates the highly competitive world of consumer electronics that Stringer, a media man, is entering." More from the article: "Caught flat-footed with a late introduction of an Internet version of its 25-year-old Walkman, Sony saw profit from world audio sales fall a cataclysmic 48 percent in the final quarter of last year. 'Samsung is like the old Sony,' said [George] Gilder who edits the Gilder Technology Report. 'Samsung has much of the spirit of Sony 10 years ago.'"
In an interview with Japan's Kyodo News, Stringer defended Sony. "Sony is still one of the No. 1 brands in the U.S. and not in a crisis. I want to excite the great company once again as I did in the entertainment world," he said. "At studio we have actors and actresses and at Sony we have engineers. Both are talents."
BusinessWeek has more, writing: "Stringer vows instead that, on his watch, Sony will finally achieve the long-promised magic of convergence between its disparate entertainment and consumer-electronics units. If this company were American and not Japanese, the board of directors would probably have forced a drastic solution a long time ago."
Motorola's Ring Tones
Motorola is one U.S. electronics company that could help continue to boost the success of the industry here. The company has plans to sell some new fancy camera phones, with plans for the phone to "make it easier for consumers to store, share and print pictures, betting that cameras in handsets are no longer just a clever gimmick," Reuters said.
But plans for an Apple iTunes phone are not going as swimmingly. "Motorola Inc. postponed plans Thursday to unveil a cell phone that can buy and play songs from Apple Computer Inc.'s iTunes download service, a sudden decision which may reflect tensions with cellular companies who also want to sell music to mobile phone users. The company briefed reporters on the new offering earlier in the week and planned to unveil the phone at the big CeBIT technology show here. Motorola's two-story exhibition booth included a display of iMacs running iTunes, but the new phones weren't there," The Associated Press said.
The Chicago Tribune has these details on the gaffe, noting "the Schaumburg cell phone manufacturer canceled at the last minute. And the reason speaks volumes about the balance of power between cell phone-makers and phone service providers, a balance increasingly tilted toward the latter, analysts say. Motorola had previewed the iTunes phone to the media earlier this week, with the intent of publicly announcing it Thursday. Then the company got a last-minute message from a wireless carrier or carriers, and indefinitely postponed the announcement--a highly unusual occurrence. Why would a wireless carrier have such sway with the world's second-largest cell phone-maker? Because of the unique structure of the industry: Wireless carriers--particularly in the U.S.--buy phones and then often subsidize their cost to consumers."
No word on what Apple makes of the delay, but Apple is making its own news. The company is joining the Blu-Ray fray. "Apple Computer said on Thursday it had joined the Blu-ray forum, which is battling with rival HD-DVD forum to set the next standard for DVD. ... Apple has become a member of the alliance with a seat on the board of directors. Other directors include Dell, Sony, Hewlett-Packard, Hitachi, Mitsubishi, Panasonic, Philips, Samsung and LG. Hollywood studios that support Blu-ray include Walt Disney Pictures and Television, Twentieth Century Fox and Sony Pictures," Reuters said.
Sony's Game Face
The anticipation for the U.S. launch of Sony's new PlayStation Portable gaming device is heating up. "It is just the sexiest device I've seen since the iPod," Sean Spector, of online video game rental company GameFly, told The New York Times. "Citing its 'beautiful industrial design,' he added, 'What the iPod did for music, this could do for electronic games.' The device's imminent arrival is a leading topic of conversation this week in San Francisco at the Game Developers Conference, an annual industry event. More than 100 game developers and publishers, large and small, from Electronic Arts to Planet Moon Studios, are planning to make special content for the device. Sony promises that 24 games, most of them $40 to $50, will be ready when the PlayStation Portable goes on sale March 24 with one million devices available to retailers that day. A lot of PlayStation 2 franchises with PlayStation Portable twists are ready to go, like Sony's Twisted Metal: Head On, Konami's Metal Gear Acid and Activision's Tony Hawk's Underground 2 Remix, developers say."
Not to be outdone, gaming rival Microsoft is offering a preview of its next Xbox. Its next-generation system "will include an emphasis on high-definition content, an integrated media browser and 'microtransactions' for in-game purchases. In a speech at the Game Developers Conference here, J Allard, the Microsoft executive overseeing the software development tools for the new Xbox, said the new streamlined interface would help draw more users to the platform," Reuters reported. The Seattle Times also has more on the next Xbox.
Groovy News For Microsoft
Speaking of Microsoft, the company is using some of its vast stash of cash to scoop up Groove Networks, a company that makes collaboration software to help people work remotely from the office and share files online. Financial details of the deal were not disclosed.
"Groove was founded in 1997 by Ray Ozzie, the creator of the Lotus Notes e-mail software. Once the acquisition is completed, Mr. Ozzie will join Microsoft as its chief technical officer, reporting to Chairman and Chief Software Architect Bill Gates," The Wall Street Journal Online said in its coverage of the deal, which was announced today. "Microsoft, of Redmond, Wash., already owns a minority stake in Groove following a $50 million investment in the company in 2001. The startup has raised more than $155 million in financing from Microsoft and others. Microsoft said Groove's 200 employees would be added to its Information Worker division, which develops its Office suite of desktop products. The acquisition is expected to be completed by June."
3D Movie Action
You might be able to watch a 3D movie soon without having to wear those nerdy glasses. From Reuters: "German research institute has developed a screen that requires no special glasses to display three-dimensional images and can be viewed even from the side. The display is meant to help architects and engineers visualize their designs or to make flight simulators more realistic. Doctors at the German University of Tuebingen have used it to train for minimally invasive surgery."
Using Tech Wisely
Singapore tops the list for being the most efficient user of information technology. The International Herald Tribune explains more: "Singapore, a Southeast Asian island state with a population of four million, ranked first in a number of categories, including quality of math and science education, affordability of telephones, and the government's efforts to promote information technology. Singapore came in second over all last year. The study is aimed at showing how countries that support information technology development can bolster their growth prospects, the World Economic Forum said. Singapore, whose tightly controlled government offered tax concessions in the 1970s to attract investment in high-technology industries, is viewed as a model by many developing nations."
Gizoogling, Snoop Style
Rapper Snoop Dogg's "shizzle" style of talking gets its own Snoop-friendly search engine, modeled after Google, called Gizoogle.com. The Washington Post's Style section writes about the site today. "Gizoogle is the illegitimate, thugged-out cousin of Google that translates its search results into Snoop Dogg slang, or izzle-speak, a sort of nuevo pig Latin. Enter 'Vice President Dick Cheney' in the search field and it turns up 'Vizzy President Dizzle Cheney.' Secretary of State Condoleezza Rice is 'Condoleezza Rizzle.' It then supplies the same information on the subjects as Google does -- except it's izzle-filled and obscenity laden."
A search on Gizoogle for my Web site pulls up this funny Gizoogle-ized blurb from a blogger's posting about my writings: Webb "used ta publish 'Filta' at The Washington Pizzay n now runs www.cynthiawizzles" LOL. (Filta, is Filter. and The Washington Pizzay, is of course, The Washington Post).
A Tribute To A Tech Columnist
Shannon Henry, who has covered technology and the D.C. tech sector for the past decade at The Washington Post, penned her last "Download" column today and chatted with readers in an online discussion about where tech has been and where it is going. Henry's voice will be missed. Full disclosure: I filled in for Henry at The Washington Post when she took leave to write her first book and have been friends with her ever since. She now plans to write occasionally for the paper and turn her attention to mothering her small child and to writing a book on motherhood. Best of luck, Shannon!