Last July, while most people were taking summer vacations, the Sony Corporation of America made a little noticed, but crucial announcement.
Jay Samit, a longtime music industry executive, was appointed general manager of Sony Connect, a new subsidiary that will sell songs online and allow consumers to play them on their Sony gadgets. His appointment was largely overlooked outside the company. But inside, the move was immediately understood as a way to unite the sometimes conflicting electronics and content divisions. That internal battle was seen by many as the reason Sony, the inventor of the Walkman and the biggest player in the portable audio market, was being trounced by Apple Computer and its hit, the iPod music player, in the emerging digital segment. Something had to be done.
How Sony got outflanked is as much about Sony's inflexibility as Apple's initiative. With its ownership of premier music labels and its foundation in electronics, Sony had all the tools to create its own version of iPod long before Apple's product came to market in 2001. But Sony has long wrestled with how to build devices that let consumers download and copy music without undermining sales in the music labels or agreements with its artists.
News source: C|Net News.com
