Sony hopes for digital revolution

Nobuyuki Idei is the president of one of the world's most powerful corporations, but on this particular day he sounded more like a grandfather reminiscing about his youth at the family dinner table.

"In those good old days, Sony made electronics equipment, three national networks ruled the airwaves, computers referred to IBM mainframes, and phone companies minded their own business," Idei said in a speech seven months after taking the helm of the Japanese multinational. These days, he added, "it seems that everyone is jumping into everyone else's business, and the old rules are broken."

At the age of 50, Sony is having a midlife crisis. Once dominant in all things electronic, the conglomerate is now facing the "maturation" of the home entertainment industry, where widely available technology and low-cost labor have led to rising competition and smaller profits. As a result, Sony is staking much of its future on personal computing, a relatively unknown territory where companies that survive more than a year are often considered hardened veterans.

The consequences of Sony's course go far beyond the Spartan hallways of corporate Tokyo. As other Japanese companies follow the industry leader's path, its strategy could presage a new economic war between Japan and the United States, which has long considered the PC market its own. And the move will likely have a significant impact on the technology itself by hastening the anticipated merging of the television set and the personal computer--a convergence that digital soothsayers predict will be felt with Loma Prieta-like magnitude from Hollywood to Wall Street.

With stakes this high, Sony is wasting no time. Barely six months after announcing its plans to enter the PC market in a major partnership with Intel, Sony showed the world its first branded personal computer at the PC Expo this week in New York. [See CNET analysis of Sony PC]

A company official also disclosed to CNET that it is planning a notebook that would bear the Sony nameplate. Lastly--for now--it is considering the possibility of manufacturing a Network Computer, the Oracle-sponsored box designed primarily for affordable Internet usage at a target price of $500.

A critical mass
"The PC is approaching a major stage in its development," said Carl Yankowski, president and COO of Sony Electronics. "The consumerization of the PC in the United States is finally reaching critical mass."