Kutaragi forced off Sony's board

TOKYO--Today, Sony announced a major reshuffling of its board of directors. As a part of the changes, Sony Computer Entertainment president Ken Kutaragi, 54, will step down from his position as executive deputy president of the Sony group. Industry watchers were stunned at the announcement, as Kutaragi had been considered a likely candidate for the top spot at Sony. He will remain with Sony as the head of the SCE gaming division and will also be given a new title, that of group executive officer, as of April 1.

In addition to resigning as executive deputy president, Kutaragi will also step down as head of Sony's home electronics and semiconductor solutions divisions. The home electronics division will be taken over by executive deputy president Katsumi Ihara, 54, who has been seen as Kutaragi’s main rival for the top spot at Sony. Unlike Kutaragi, Ihara will continue to hold his position as executive deputy president on the board. The semiconductors solutions division will be managed by Sony executive deputy president Ryoji Chubachi, 57.

Sony also announced that its CEO, Nobuyuki Idei, 67, will resign after final decisions are made at the general shareholders meeting on June 22. Taking over Idei's position will be Howard Stringer, 63, Sony group vice chairman and head of Sony Corporation of America. This will be the first time since its establishment in 1946 that Sony will appoint a foreigner to lead its operations.

Stringer joined Sony in 1997 and led the company to acquire Metro-Goldwyn-Mayer (MGM) last year. Prior to joining Sony, Stringer had a 30-year career as a journalist, producer, and executive at CBS, including seven years as president from 1988 to 1995. Since Stringer's specialties are concentrated in the content and software sector, analysts expect that Chubachi will be managing Sony's electronics businesses. While Sony's electronics division accounts for more than 60 percent of the group's total sales, it has been falling behind in its operations, such as with its late entrance into the flat-screen TV market. In January, Sony lowered its operating profit estimate for the current business year by 31 percent due to falling prices of electronic products, such as TV and DVD recorders, bringing analysts to speculate the possibility that the electronics division may face its second year of red ink.

Along with CEO Idei, Sony president Kunitake Ando, 63, is also scheduled to step down from his position, which Chubachi will also take over.