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A man walks past an advertisement for Sony Walkmans at an electronic shop in Tokyo May 5, 2011. Sony, despite its iconic brand, remains out of step with the rest of the global technology world and its talent for crowd-pleasing innovation has largely evaporated. (KIM KYUNG-HOON/REUTERS)
A man walks past an advertisement for Sony Walkmans at an electronic shop in Tokyo May 5, 2011. Sony, despite its iconic brand, remains out of step with the rest of the global technology world and its talent for crowd-pleasing innovation has largely evaporated. (KIM KYUNG-HOON/REUTERS)

SPECIAL REPORT

Sony stumbles: Did Stringer's makeover fail? Add to ...

"Somebody needs to change Sony. I thought Stringer would change things a bit more, but it seems there were limits to what he could do," says Katayama.

Sony could still find inspiration from its humble beginnings. "Nobody knows about the days when Sony was just a neighborhood workshop and nobody tries to retain that spirit as they do at Honda," Katayama says, noting that Honda, for instance, eschews memberships in the clubs of Japan's corporate elite, yet manages to retain the entrepreneurial spirit and atmosphere of a street corner workshop.

Honda still lets its engineers roam. It is renowned for giving them creative free rein to conduct fundamental research that may never end up as a product - engineers have unraveled the genome of rice, experimented on cockroaches to see how they avoid collision and designed and built a small jet aircraft.

Google is known for having established similar creative time for its staff, while Jobs at Apple is known for keeping his core development team to a size where he can remember everyone's name.

HACKING EXPOSES WEAKNESSES

Stringer has sought to unleash creative juices by establishing partnerships between disconnected business units, a strategy he can claim has at least started to result in hybrid products such as Xperia Play - everyone outside Sony refers to it as the PlayStation phone - from handset operation Sony Ericcson.

The massive Internet security breach the company suffered in April is all the more difficult for the company to come to terms with because it risks hurting that strategy by damaging an online service that connected the dots.

"The PlayStation network and (entertainment platform) Qriocity were really intended to be a bridging and ecosystem approach, trying to tie together the TVs, the PlayStation, PSP, really tying in all of those devices together into a complete ecosystem," says Mark Harding, an analyst who follows Sony for U.S.-based investment company the Maxim Group.

"If people lose faith and trust in the security of a commerce platform or an ecosystem platform like that, it does do damage to the strategy," he added.

In the biggest-ever theft of data on record, hackers stole details from more than 100 million accounts of Sony's PlayStation Network and PC-based online gaming service as well as its Qriocity music service. It prompted outrage from users, 90 per cent of whom are based in the United States and Europe, not just because the company closed the network down but because it waited a week to announce the breach.

Critics, including the hacker community and Wall Street analysts, laid the blame squarely on Sony, for going to war with hackers and programmers who have dared to crack the code in its systems.

In 2001, Sony threatened legal action against one owner of the Aibo, Sony's robot dog, after the owner posted software showing other owners how to make the Aibo dance. Earlier this year, it took George Hotz to court after the famed hacker, known for unlocking Apple's iPhone, cracked open the PlayStation 3 to let owners run their own software.

This contrasts with the behaviour of many other major technology companies, who at least seek a partial accommodation with elements in the hacking community, and certainly don't go out of their way to make enemies.

The Internet breach sparked thousands of comments on the official PlayStation fan page on Facebook and on its blog, some of them from users who said they would switch to rival games networks, such as Xbox Live, a Microsoft Corp product.

Sony insists it wasn't too slow to admit the breach, although Sony watchers speculate that Sony may have been loath to admit it had been hit by hackers and wanted to play down the attack.

It took Stringer another two weeks before breaking his silence on the issue and then he unapologetically defended the delays, saying they weren't bad by corporate standards.

Speaking at a press roundtable last Tuesday, where he fed journalists breakfast on the 30th floor of Sony's New York headquarters to mark the sixth birthday of the PlayStation 3 games console, Stringer downplayed the breach, describing it as "hackers stealing games that were already free."

"You're telling me my week wasn't fast enough? We had to know what had been stolen rather than leaking information out piece by piece and panicking customers," he said.

The defiance didn't go down so well with some PlayStation customers. One blogger on website techdirt.com concluded: "CEO Howard Stringer apparently has come to the conclusion that there's still plenty of room for more foot in Sony's mouth."

To make matters worse, there were disclosures about three other problems with the security of Sony websites last week.

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