All Things D Live: Sir Howard Stringer, CEO of Sony

9:45 Stringer is on stage. Mossberg: Last time you were up here, things were tough. Stringer: We've turned things around but before profit was not a priority in Japan. Reminds me too much of Benny Hill.

9:47 Mossberg: You didn't build your own facilities for LCD production and had to buy them from a competitor, Samsung.

Stringer: That was done to leap-frog the tech, but that didn't work. The brand covered us and we were still number one in the US one year. LCDs have a lot of life in them, but we started doing OLEDs a few years ago and we can't mass-produce it, but we've got a $250 model. Mossberg corrects him, the XEL-1. Stringer jokes that it's $250 for people in this room (a special deal). And Mossberg leads him: How big is it? Stringer: 11 inches, but the Dreamworks execs love it.

He's showing a 0.3mm OLED that is thin as a playing card and can be used in a 27- inch TV that will ship soon. But not at reasonable prices.

Mossberg: Is the video game business profitable?
Stringer: The PS3 is building excitement. The model is to lose money on the hardware for a long time and then make money on the software and later the hardware. The PS3 is expensive. We'll see games in June, not GTA4, that take advantage of the network, too. (Metal Gear.)

Mossberg: But don't gamers want to just play games on these?
Stringer: People are starting to download content, though. The first million customers of the PS3 were gamers, but more people ended up after that being Blu-ray customers and that's why we won the format war.

Mossberg: I thought you won the war with bags of cash?
Stringer: I thought that's what they did. You read it in the paper. We are not in the check-writing competition.
Mossberg: Then I believe it!

Mossberg: Does physical media have a future?
Stringer: You can finally see, using Blu-ray, the number of Arabs in Lawrence of Arabia. Digital downloads aren't matching the detail now. (I don't know if I agree that it's not somewhat close, thoug—B.L.)
Mossberg: You're in the PC business. Sales have dropped a bit...
Stringer: Actually we've done well, best year ever.
Mossberg: But I'm talking about marketshare. Why are you not the number one in the market?
Stringer: Because we're high end and expensive.
Mossberg: Is this your strategy?
Stringer: Yes, the less profit the better. (Laughs from the crowd.) The fact that we have a low marketshare, like Apple, doesn't mean we're inferior. Our engineers like to try new things, too.
Mossberg: What about craplets on your PCs? It loaded all this stuff on my machine I had to uninstall. (He owns a Vaio.)
Stringer: I have to evaluate these craplets, and I promise you a craplet review. (Vaio's have the most craplets of any PC—B.L.)

Mossberg: What about the Walkman phones?
Stringer: We started the trend and have more phones sold than the iPhone. All of this is on the back of music downloads. Nokia's got that all-you-can-eat system.

Stringer talks about being down on the iPod battle, too, but they're coming back by his estimation, quoting that a London paper said the audio quality was better.

We're a giant department store competing with lots of boutiques like Apple (although not tiny anymore) and ebook readers from Amazon. But do we want to invest that much money to compete with the Kindle's wireless? And we have to deal in millions in millions and prioritize.

Question from the crowd: What about advancing audio?
Stringer jokes: We have two new speakers that are so expensive, it's mind boggling, and the three people who can afford them love it. He then says it's not different from before.

Question from the crowd: Can Sony do software as good as their hardware?
Stringer: The test will be the PS3 network, and we have a lot of software engineers, contrary to popular opinion. They're well versed at doing firmware, but our software engineers are in vertical silos separate from each other. We've knocked down those walls. Firmware is late, but app-ware comes early. And you'll see how we've done. (We've also taken a lot of American software engineers into the company because they are more flexible, typically.)
[All Things D]