Can Sony Regain the Magic?

Early last summer, a thousand of Sony Corp.'s (SNE ) best and brightest from around the globe converged on Tokyo for a closed-door powwow. Sony's top execs had used such rallies in the past to kick off new corporate strategies, which is what President Kunitake Ando had in mind when he took the stage. The world was about to change, he declared. The personal computer was quickly losing its status as the heart of the Information Revolution. Soon, the real action in info tech would migrate to the living room, the family room, the automobile, the beach, the holiday retreat. Wherever people gather, or strike out on their own, Net-capable audio and video gadgets, cell phones, and games would keep them entertained and in touch.

Using graphs and diagrams to drive home his point, Ando insisted that Sony, the world's premier gizmo maker, was better positioned to triumph in this broadband world than any of its rivals. He went on to argue that nobody--not Samsung (SSNLF ), not Microsoft (MSFT )--had a sharper vision of how consumers would navigate superfast networks in which a single fat wire, or a sliver of radio frequency, would handle multiple layers of voice, data, and video. Already, he noted, Sony's violet-gray Vaio laptops were hits with the digerati, who liked to edit their own photos and music files and exchange them over the Web. Once broadband networks were ubiquitous, all of Sony's cameras and audio devices would meld into a seamless distribution network for Sony's movies, music, and games, supported by the company's own online shopping and financial services. "Ando's message was clear and aggressive," says Hiro Uchida, Sony's general manager for strategic ventures. "Sony faces big challenges, but Ando showed us that we're getting activated."