Sony (SNE ) is Japan's $56 billion premier electronics giant. It has one of the top 10 brand names on the planet, and it spits out more than 100 million devices a year. Its design sense is second to none, and its mastery of key technologies--from the manufacture of DVD players to digital storage to the miniaturization needed for its palm-size Net camcorder to seamless data transmission between devices to digital television--is unsurpassed.
Behind the dazzling array of devices is a tough financial reality: Sony has to innovate ever faster to maintain any pricing power in a business where commodity prices swiftly devour margins. Korean and Chinese rivals are offering ever-cheaper alternatives to Sony DVD players, TVs, and digital cameras. The company is dangerously dependent on PlayStation 2 for much of its profits. Its roster of inventions, while impressive, hasn't included a breakaway product in 20 years.
Sony is betting on the networked universe--the fusion of Sony digital devices with content, all transmitted at the blink of an eye through high-speed connections, both wired and wireless. But this future has yet to arrive. A crucial experiment in wireless data phones went seriously awry. Devices envisioned as portals to the Net or to other digital formats, such as the PlayStation, have yet to play this role in any serious way. Even so, it's an alluring vision.
Data: Company reports, BusinessWeek