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What’s going on behind the scenes between Apple and Sony?
Thursday, January 20, 2005 - 12:55 PM EDT

"Sony missed out on potential sales from MP3 players and other gadgets because it was overly proprietary about music and entertainment content, the head of Sony Corp.'s video-game unit acknowledged Thursday," The Associated Press reports.

"Ken Kutaragi, president of Sony Computer Entertainment Inc., said he and other Sony employees have been frustrated for years with management's reluctance to introduce products like Apple Computer Inc.'s iPod, mainly because the Tokyo company had music and movie units that were worried about content rights," AP reports. "High-ranking Sony officials have rarely publicly said their proprietary views were a mistake. Kutaragi, who has long been viewed as a candidate to lead Sony, was unusually direct in acknowledging Sony had made an error and blaming proprietary concerns from its entertainment division. Sony's music players initially did not support MP3 files and only played Sony's own format called Atrac." Full article here.

MacDailyNews Note: This is nothing new. The internal conflict within Sony was reported by Wired Magazine which we noted in our article two years and three days ago on January, 17, 2003: "Wired calls iPod the 21st-century Walkman; says iPod revolutionizing consumer electronics - January 17, 2003

Of interest, today in a column about Apple's iLife '05, The New York Times' David Pogue writes, "When Steve Jobs unveiled iLife '05 last week at the Macworld Expo, his presentation featured a strange, halting appearance by the Sony Electronics president, Kunitake Ando. Mr. Ando didn't announce any new products or unveil any new collaboration with Apple. But the weirdness of the whole appearance has fueled speculation that there's something going on between the companies that we don't know about." Full article here.

MacDailyNews Take: Are we seeing signs of forms being constructed and concrete being poured for a foundation for something Sony is going to debut soon or something Apple and Sony are going to do together soon? Could it be a music deal, or Vaio-related (Mac OS X), or both, or something else, or nothing at all? Take a look at Steve Jobs' Macworld Expo keynote presentation, at about 57:37, where Jobs says, "You know, we do work very closely with Sony on digital still cameras and these new camcorders, which is really great. And who knows? Maybe someday, computers and music, too."

Related MacDailyNews articles:
Apple embarrassing Sony as iPods take Japan by storm - November 28, 2004
Report says Apple's Steve Jobs offered Sony an iTunes Music Store deal - September 03, 2004
Apple iPod killing Sony on its own turf; 6 of top 8 music players in Japan are iPod models - August 19, 2004
Washington Post: Sony's internet music service 'is an embarrassment to the company that gave the world the Wlakman - May 29, 2004
NY Times pans Sony Connect debut: 'maybe they ought to call it Sony Disconnect' - May 05, 2004
Analysts: Sony vs. Apple 'likely to clash for years, but will likely end in detente' - May 05, 2004
Analyst: Sony and Apple marriage 'would make no sense' - March 05, 2004
Sony CEO says he 'would consider buying Apple Computer' - March 07, 2003
The Economist: Apple is now Sony's teacher - February 27, 2003

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Jan 20, 05 - 02:13 pm Comment from: oldmacfan

Sony so much wants Apple Pie

Jan 20, 05 - 02:21 pm Comment from: Newmanstein

Micro$in would shiver and shake in their boots if some sort of deal was to take place. Everything Apple and Sony running HD and everything PC still in the same rut.

Jan 20, 05 - 02:29 pm Comment from: shempzilla

Yes, it "could be," since you've listed every possibility. Way to cover your bases, buys. LOL

Jan 20, 05 - 02:34 pm Comment from: Tommy Boy

When Sony's chairman walked on-stage during Jobs' keynote I expected that Sony and Apple would announce a partnering of iPod-Connect-Walkman.

Jan 20, 05 - 02:39 pm Comment from: solarflare

His appearance at the keynote ONLY ment that Apple and Sony are not enemies.

Pure and simple - it was just a show of face to say that even though we are competing in the same markets, Apple and Sony are friends.

Don't read anything more into it!

And pigs will fly before Sony make a Vio with Mac OS X on it!!!

Jan 20, 05 - 02:40 pm Comment from: dennis

For a few minutes, I was afraid that guy was never going to leave the stage. I think it was an impromptu appearance because of the HD stuff and nothing more.

Jan 20, 05 - 02:45 pm Comment from: notatotalsucker

Hey, this is what happens when your business covers too many bases. They not only compete with external businesses, but also internal businesses as well.

They can't think about things clearly when they need to consider the ramifications of what might happen to another part of the business if xyz gets made.

IBM made a similar mistake years ago with the PC, which was crippled for years* so it wouldn't take sales away from their mini/mainframes.

Compaq, not IBM, led in the speed stakes in the beginning.

* ok, it still is crippled

Jan 20, 05 - 02:58 pm Comment from: effwerd

It was a terrible appearance by Sony's president at the keynote. It was rough to hear Steve emphasize his "Bye" repeatedly, as in, "get off the stage, you're ruining my presentation."

Jan 20, 05 - 02:59 pm Comment from: TheCrunge

I predict a Sony/Apple media interface for the living room, specifically dealing with HD video.

Jan 20, 05 - 02:59 pm Comment from: JayPiddy

Read an article speculating on the "2005 the year of HD" and it went on to say that Apple and Sony could put up and iTunes like store for movies in conjunction with Sony as a content provider. It furthered that Sony now sees the power of Apple and may be regretting not taking Steve up on the original offer made on the back nine a couple of years ago. Then again it was just speculation.

Jan 20, 05 - 03:16 pm Comment from: Viridian

"His appearance at the keynote ONLY ment that Apple and Sony are not enemies."

solarflare,

I have to disagree. CEO's of companies much larger than Apple don't fly half-way around the world at Steve Jobs' beck and call just to say they're not enemies. A press release from Sony would have sufficed. Tom Yager of InfoWorld also mentioned Mr. Ando's appearance at Macworld, and I have to say that they're both sending a not-so-subtle signal that something's up between the two companies. Sony is scared of something, probably as Yager says, Apple's almost complete dominance of the video-production sector. The only thing that Sony makes in that field that Apple doesn't, is cameras.

Jan 20, 05 - 03:17 pm Comment from: david

I love the part in the keynote where the sony guy just stops talking. He can't think of the word, and just stands there. That was great.

As for him being there, apple needed to show there was a reason for putting hd in imovie, and sony needed to promote there camcorder.

Jan 20, 05 - 03:28 pm Comment from: sg

How about the comment from Jobs in the keynote (57 minutes in) right after the Sony guy left the stage? Jobs said basically "we do work closely with Sony on digital cameras, camcorders and who knows maybe someday computers and music too."

Jan 20, 05 - 03:39 pm Comment from: macnut222

Of course there's the fact that Steve said: "You know we do work very closely with Sony on digital still cameras and these new camcorders which is really great. and who knows, maybe someday computers and music too."


'Nuff said.

Jan 20, 05 - 03:40 pm Comment from: matty g

david


flying a guy half way around the world just for that tho?

there will be something more to it that that i'm sure and it'll be pretty big

"and maybe one day music and computers too?" hmmmmmm

Jan 20, 05 - 03:41 pm Comment from: macnut222

oops, didn't see previous post

Jan 20, 05 - 03:41 pm Comment from: Twenty Benson

Whether Sony and/or IBM, it seems a bit messy to have a partnership unless it is a full and unified one - and Apple are showing the world that unity across a whole system WORKS! Tech corporations like Sony might now be realising that the REAL future money lies in backing a GOOD unified system and (as it happens) a system with a small current market share, or looked at another way: with a truly MASSIVE POTENTIAL market.

IBM has already decided there is little to be made from selling PCs to a saturated, cheap, market - a market which seems to have nowhere left to go both in terms of hardware and software (at least, nowhere Apple isn't already beating a trail to).

Whereas a closed unified partnership with companies like IBM and Sony ENDORSING OS X and the 'Apple Way' could set in motion a landslide to untold riches for those involved.

Jan 20, 05 - 03:44 pm Comment from: MCCFR

There are so many areas and so many levels where Apple and Sony could work together to the common good.

The "blue sky" vision is that of a Sony/Apple JV similar to Sony-Ericsson. In the current SE JV, Ericsson pretty much provides the technology, Sony adds some CE value (via Memory Stick mainly) and is reponsible for applying a "consumer society" marketing spin given that Ericsson couldn't market their way out of a paper-bag.

However, the idea that Sony can (or would be allowed to) teach Apple anything about marketing is, quite frankly, a pipe-dream. However, it is easy to imagine Apple concessions within Sony-branded retail premises (here in the UK, they're called SonyCentres and are effectively franchises) just as it is possible to imagine Sony concessions within most Apple Stores. Furthermore, it only takes a minor leap of imagination for both companies to make "space" available on their respective web storefronts for the others' brands and products.

This would allow Sony to gracefully exit the (failed) next-generation Walkmans from the market and derive footfall in locations that are too small to support a dedicated Apple Store (even at the mini level). It would also allow a graceful exit from Connect, which will never be anything more than a vanity "me-too" storefront.

Far better to work jointly with a proven winner, methinks!

More to follow ->

Jan 20, 05 - 04:27 pm Comment from: MCCFR

Other areas of co-operation are feasible.

SJ practically admitted during the keynote that Apple has committed to Blu-Ray rather than HD-DVD for the next generation of optical media, which - given Apple's presence in the prosumer video editing & production marketplace - is a major fillip for Sony.

It would also be interesting to see if Apple and Sony can work together to create a DRM methodology that works in the multi-channel era. We know that the optical audio port on an Airport Express can pump out a multi-channel data stream, but (as yet) there is no "official" Apple product that utilises that functionality.

What if a new QuickTime 7 version of iTunes dramatically introduced the concept of multi-channel audio using either AAC HE. This would allow Sony's music division to create SACD discs that worked in the audiophile world of "real" hi-fi buffs as well as implementing Fairplay-protected AAC HE files in an alternate session on the CD layer.

Given a sufficiently high-quality approach to the encoding, this would actually start to make SACD discs more attractive as a one solution fits all format: SACD for multi-channel, protected multi-channel high-resolution AAC HE for iTunes/AX connected to home cinema, CD for normal audio listeners (including car audio), and self-encoded AAC for iPod.

Add in SACD authoring/playback through the Blu-Ray drive on the Mac, and Sony are laughing in comparison to the supporters of DVD-A.

Seems quite reasonable to me, but add salt to taste and shoot me down in flames if you feel like it…

Jan 20, 05 - 04:37 pm Comment from: eyeno

playstation mini

Jan 20, 05 - 04:37 pm Comment from: giofoto

Just a reminder that the Apple Powerbook 100 was made by Sony. They have had a relationship long before than some of us realize.

Jan 20, 05 - 04:40 pm Comment from: Dave H

The appearance followed an announcement by Gates and Co. that Sony perhaps, might, possibly consider an alliance with Microsoft. Gates tried to spin it as a done deal with his typically high self-opinion.

So Jobs and Ando immediately appear together at an event likely to get huge media attention. There are two ways of looking at it; either the two companies are working on something, or just as likely, Sony have used Apple to remind Gates the offered deal had better be good.

Jan 20, 05 - 04:46 pm Comment from: atomic flower

Sony and Apple are very similar.

Both are innovative companies, Apple is smaller, so more mobile. They both make beautiful aesthetically pleasing designs at regular consumer pricing, they both like locking people into their hardware/software. ie. ipod needs iTunes, ie. (Sony and memory sticks, minidiscs. ie. Apple needed ADC connectors and webcams with the "apple designed firewire" standard for iChat, Apple-AAC)

They both like to control the whole thing. This is why Jobs likes Sony. He models Apple after much of what Sony does.


Yes, Apple is embracing standards now... but they used to try to create them and keep them proprietary.

Jan 20, 05 - 04:57 pm Comment from: Al

I saw the keynote and the first thing that came to my mind was that Sony has asked Apple to provide HD capable iMovie for Mac and Windows to be distributed with Sony's new consumer HD movie cameras.

He did go on and on about Apple's software.

It could be as simple and as revolutionary as iMovie for Windows.

Jan 20, 05 - 05:05 pm Comment from: ken

Well, for a starters there could be iTunes on each Sony computer sold . . .

My bet is that they are working on movies as well as music and I would not be surprised to see technology delivered in 6 to 12 months that allow for movies to be added to TMS - on a rent and/or purchase basis.

The challenge of figuring out what is in Steve J's mind is that his mind is about two years ahead of ours.

Jan 20, 05 - 05:09 pm Comment from: giofoto

iMovie for Windows? Don't think so. I think they are going to collaborate in the professional arena. More refined and integrated systems for TV Stations, Movie houses, Special FX houses, etc, etc. That is much more plausible. HD for cosumers is a given.

Jan 20, 05 - 05:29 pm Comment from: solafide

Sony in talks with PIXAR

Jan 20, 05 - 05:39 pm Comment from: Jack A

I thought it was almost as if Steve cut him off because it seemed like Mr. Ando was lost and maybe going to say more than he should. But maybe Steve was just coming to his rescue after he lost his thread. Anyway I think there are two possibilities.

1) An iMovie Video Store where you can download HD vids in H.264 (Steve has said that the problem with a video iPod is lack of content) They could have it play on video iPods and the new PSP units

2) OS X on Sony products (this is quite a bit more wild but would crush M$ if it came to pass - the recent objections I have read to Macs getting into business because of there being only one vendor would be solved)

I also think "Blu-ray" is a much cooler name than HD-DVD cool smile

Jan 20, 05 - 05:58 pm Comment from: Dave H

solafide

That'll be it. Clever thinking.

Jan 20, 05 - 06:30 pm Comment from: anon

solafide,

No. Jobs would not use an Apple Computer forum to drop hints about a Sony/Pixar deal. It would be bad form. He just would not do it that way. It has nothing to do with Pixar. It is something to do with Apple and Sony. Can say no more. Watch and see...

Jan 20, 05 - 06:33 pm Comment from: Macaday

How about AAC on Sony MP3 players?

And PowerPC OSX Sony Vaio's?

And Sony replacing Disney for Pixar distribution?

Or even licensing use of the iPod click wheel?

Jan 20, 05 - 06:36 pm Comment from: macnut222

anon, it could have something to do with Pixar if a QuickTime Movie Store were in the works.

Only if...

Jan 20, 05 - 08:08 pm Comment from: sg

My votes:
1. Sony Car Stereos w/AAC Fairplay
2. Sony/Apple co-branded home theater server
3. Sony Walkman w/AAC Fairplay
4. Sony & Pixar providing movie content for an Apple Movie Store

Jan 20, 05 - 08:12 pm Comment from: Ben4210735

Apple is going to buy Sony for $12bn, Apple has been hinting at a large purchase... smile

(in my humble opinion)

Jan 20, 05 - 10:39 pm Comment from: Sol

I think that SONY needs to retire ATRAC and to start selling iPods with their logo on them. They lisenced the Palm OS so why not the iPod OS? If Apple give SONY the freedom to modify iPods any way they like (eg. bigger colour screens, thinner design, new software) I would be all for it.

As for Apple and Sony working on computers together, maybe Steve jobs was refering to components for the next generation of laptops. The idea of OS X for anything other than an Apple product is a long shot. Even IBM do not have that privlage yet.

Jan 20, 05 - 10:43 pm Comment from: Wha

My guess is it could be two things:

1) A possible partnership of some kind

* or *

2) Sony heard Microsoft talkin' alot about a partnership which Sony doesn't want and this is Sony's way of dissing Microsoft.

Jan 20, 05 - 11:17 pm Comment from: Less is More

Apple, staying on the leading edge of creative software, is getting ready for the High Def' world ... and Sony has a cooperative part to play in Apple's strategy.

Ando's appearance seals some sort of deal to cooperate -- on "what" and "how" is where the real news is. Standards? Software? Hardware? That last one is what makes Mac users drool.

Jan 21, 05 - 12:16 am Comment from: Caruso

Put Playstation 2 into the Mac mini......Absolute, total homerun of epic proportions. Marketshare goes from 4% to 30% in a year.

Use that proprietary power connector on the mini for some sort of "cable-in" set-up and you have your digital media center. Cable goes in, you record on the HD a la Tivo, and play playstation on it. Set up and access from your own home page anywhere. Eventually, stream the video from your mini at home to a window at work or watch it on your video enabled, WiFi equipped, cell phone iPod.

Jan 21, 05 - 06:26 am Comment from: MCCFR

Putting QuickTime and iTunes on Playstation 3.

I assume it will have i.Link/FireWire.

How many PS3s will sell during the first year, and what would that do QT7's market penetration.

I wonder…

Jan 21, 05 - 10:35 am Comment from: Buffy

I think MCCFR has the best idea, PS3 will be running on IBM chips too. I dont know if steve would be able to let another hardware manufacturer sell OS X. But the whole movie store thing is just waiting on Tiger.

Jan 21, 05 - 11:02 am Comment from: Tommy Boy

Xbox 2 will be running on the G5. I can't wait for the emulator software to come out.

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