Kutaragi’s demotion won’t affect Cell chip

While Sony Computer Entertainment president Ken Kutaragi will soon step down from Sony’s board of directors, research and development on the Cell processor will continue. Executives at Sony disclosed to the press that work on the Cell, which will power the PlayStation 3, still remains one of the corporation’s top priorities.

"Semiconductors are a vital component [to Sony’s businesses]," commented Sony executive deputy president Ryoji Chubachi. "The Cell is important not only for the PS3, but for Sony’s consumer electronics overall, and we will stay on the same track as before. Our challenge will be to find effective ways in using it [aside from its use on the PS3]."
Yesterday, Sony announced a major reshuffling of its board of directors. As a part of the changes, Kutaragi will step down from his position as executive deputy president of the Sony group. He will also be discharged from his positions as head of Sony’s home electronics and semiconductor solutions divisions.

Industry watchers were stunned at Kutaragi’s demotion, as he had been considered a likely candidate to be Sony’s next CEO. Sony instead announced that group vice chairman Howard Stringer would take the top job, and Chubachi would become its new president. Chubachi will also take over Kutaragi’s position as head of Sony’s semiconductor solutions division.

Current Sony CEO Nobuyuki Idei commented to the press that Chubachi was chosen as the next president since "he is a good listener, and he can make appropriate decisions at appropriate times. He listens to [people’s] thoughts, and he’s good at motivating young workers."

The official reason behind Kutaragi’s resignation was that he was not able to raise the performance of the home electronics division during his tenure as its head. However, some Japanese media outlets have been speculating that Idei, who reportedly had a poor relationship with Kutaragi, decided to take Kutaragi along with him upon his resignation from the CEO seat. Industry watchers say that Idei and Kutaragi had differing views on some of Sony’s operations. While Idei came from a management background, Kutaragi was previously an engineer.

Kutaragi will remain employed at Sony to focus on his job as head of Sony Computer Entertainment, its game division. He will also be given a new title, group executive officer, as of April 1. SCE continues to be a major operation within Sony, especially given that its machines also have multimedia capability. While admitting that Sony has been beaten by the iPod in the portable-MP3-player sector, Sony vice chairman Stringer told reporters that the PSP, with its stylish design and multimedia capability, would be key to the company’s future business. Stringer also said that the success of the upcoming PlayStation 3 is an important factor.