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Nobuyuki Idei

Last April, Sony Corp. (SNE) CEO Nobuyuki Idei stunned investors by announcing that the consumer-electronics giant had suffered a quarterly loss of about $1 billion. The "Sony shock" triggered a sell-off of shares. The price plunged nearly 25% in two days and has languished since. Most amazing was Idei's later admission that he himself had been caught off guard by the dismal earnings.

There are other reasons to doubt the leadership qualities of Idei, 66. After announcing a bold restructuring program in 1999, he failed to move far enough or fast enough. Profit margins on electronics products have plunged to around 1%, down from 10% a decade ago. Sony has pushed great-looking products made from the same digital components that everyone has. So it's no surprise that its CD players, digital cameras, and other gadgets become commodities almost as soon as they hit the market.

Now, Idei is taking another stab at fixing Sony. He plans to cut 20,000 jobs, shutter plants, and overhaul the ailing electronics division. He has also given the green light to invest $4.5 billion in the development of new chips, including a superhigh-powered microprocessor that will form the guts of Sony's next-generation PlayStation game console. Sony is under-going an extraordinary transformation under Idei, says a spokeswoman. But the question remains whether shareholders can wait that long.

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