Less Bean Counting, More Engineering

Say the word Walkman ten years ago and the public reaction would have been what a great must-have product it is. Say it to a Sony financial executive today and their reaction would be to wish for the modern equivalent of it right now. These days, the must-haves are iPod nanos, Xbox 360 game consoles, and next-generation DVD players. Understandably so. These products represent state-of-the-art electronics design that consumers clamour for. They combine performance with entertainment and fashionable design cache that people want to buy into. They are also real examples of how engineering design innovation remains one of the all-time greats when it comes to contributing to corporate financial well-being.

Electronics giant Sony has undergone a real object lesson on this last point during the past few years—to the extent that it's now facing a mega-restructuring task that has already seen the axing of 20,000 jobs. The problem is, as one Sony executive put it, you can cut jobs and operating costs, but if revenues still under-perform because consumers are looking elsewhere for their must-haves, then you're not getting anywhere. Very true. Time to bring in the engineering innovation. Time to start creating and exploiting the electronics technology of the future. Time to tell the bean counters that corporate salvation is not just about saving money, it's about making it as well.

But to be fair to Sony, it should be praised for the substantial investment of 1 trillion yen it's preparing to make into semiconductor research and development over the next three years. One such innovation the company is dedicated to is the Cell processor, which is a joint venture between IBM, Sony, and Toshiba. It's set to appear in the PlayStation 3. This single-chip PowerPC could be one of the things that helps Sony find its way out of the financial doldrums. The secret behind the Cell is that it contains two kinds of processors: the PPE (Power Processor Element) and the SPE (Synergistic Processor Element), or Cell. The PPE can run existing PPC software while computationally intensive work is passed to the SPE.

Toshiba has already worked hard to create a development environment for applications based on the Cell microprocessor with the announcement of a Cell Chipset. It's made up of the new microprocessor and peripheral chips, plus a Cell Reference Set development platform. In a further move connected to Cell development, Sony and Toshiba said they will jointly develop 0.10-and 0.07-micron chip fab processes. The Cell processor will be fabricated in 0.10 micron.

But Sony needs more than just clever and successful engineering innovation. To get its financial performance back into gear, the company recently had to eat a slice of humble pie and enter into a joint venture with rival Korean company Samsung—a move that the Japanese giant would never have considered a few years ago. But nonetheless, it's a vital one for Sony if it wants its TVs to prove competitive with other international market leaders. In today's technology world, splendid isolation just doesn't pay anymore.

TAGS: Toshiba
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