Howard Stringer's long, strange trip

February 2, 2012: 3:54 PM ET

He tried. But the CEO's tenure was marked by regular public embarrassments that look all the worse in retrospect.

By Dan Mitchell, contributor

howard_stringerFORTUNE -- Will the departure of CEO Howard Stringer, whose stumbles have come to epitomize the struggles of the once-great Sony Corp., turn things around for the media-and-electronics conglomerate?

It's impossible to know, of course. Stringer's replacement, Kazuo Hirai, has a good reputation. (Stringer will remain as chairman.) What can be said unequivocally is that things have not gone well at Sony (SNE) over the seven years of Stringer's tenure. The company that was once on the cutting edge in gaming with the PlayStation and in music with the Walkman, is now widely regarded as prone to cluelessness or, worse, arrogance. It stumbles, and then when it comes time to explain itself, it stumbles again. Besides the public relations missteps, there's the business itself. Sony's ADR receipts are trading at about half what they were worth when Stringer took the helm in 2005.

The nadir came last year, when the PlayStation network got hacked in what has been called the largest data security breach in history. Sony waited a week before telling customers that their credit-card information might have been stolen. It wasn't until the next month that Stringer himself spoke up on the issue, issuing an apology that was criticized as too little, too late.

The Kodak lie

Stringer's troubles started early. In 2005, a few months into his tenure, it was discovered that Sony's joint-venture music division, Sony BMG, had secretly planted potentially malicious software code, called a rootkit, into its CDs in an ill-advised attempt at copy protection. The company lied, then hedged, and then, finally, apologized. This occurred just weeks after Sony BMG had paid a $10 million fine for being caught up in a payola scandal.

In 2006, Sony had to recall 9.6 million laptop batteries because some of them tended to burst into flames. That cost the company millions. In 2008, Sony BMG paid a $1 million fine for exposing the personal data of minors who used its Web sites.

Those are just the lowlights, though -- the embarrassing stumbles. When it comes to actual business strategy, Stringer's record is mixed. He's cut costs and turned around the gaming and movie divisions.

But even the successes were hard-won. Stringer had been in charge for a year when the PlayStation 3 was released in 2006, only to bomb in the marketplace against the Nintendo Wii and the Xbox 360. The product's fortunes have turned around since then, but that has come at the expense of profits. Sony has had to lower the price considerably just to hold on to market share.

Next-generation gaming? It may already be here

The biggest problem Sony has at the moment is in one of its core businesses -- television sets. That division has lost money throughout Stringer's tenure, and things still look bad. With the likes of price-cutters like Vizio on the rise, Sony looks moribund at best. That's not surprising then you consider that Stringer pinned many of his hopes on 3-D TV. In 2010, he told the Wall Street Journal that "it's pretty hard to ignore us in the 3-D world."

Unfortunately for Sony, he appears to have been right about that. But for the wrong reasons.

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