February 26, 2008 4:27 PM PST

Sony leery of the Eee PC?

Posted by Erica Ogg

LAS VEGAS--As a computer, the Eee PC from Asus is intended to be the opposite of intimidating--it's made for children after all. But its potential as a market force is apparently giving chills to its larger industry peers.

Here at Sony's annual Open House event, the senior vice president of Sony's IT product division said the tiny $299 notebook could potentially shift the entire notebook industry.

"If (the Eee PC from) Asus starts to do well, we are all in trouble. That's just a race to the bottom," said Mike Abary.

The Eee PC at its U.S. launch last fall.

(Credit: Erica Ogg/CNET News.com)

He means that if mainstream PC buyers start to find their needs met by a lightweight, simply featured, inexpensive portable, it's likely to impel all of the major players in the industry to pile on by lowering their prices. And that's in an industry with already low margins for retailers and manufacturers.

If the Eee PC just catches on with Linux developers, enthusiasts, and the tech-savvy early adopter crowd, that's fine by him. "But if mainstream buyers buy it, then, whoa," Abary said.

So should Sony, Hewlett-Packard, Dell, and their ilk be frightened of Asus? So far, the version of the Eee PC in the U.S. only comes with Linux, but that will soon change. Japan got its Windows XP version last month, and the U.S. should be getting one in the next few weeks. (See the full review of the Eee PC by CNET's Dan Ackerman.)

And even with just the open-source version available stateside, the numbers say it's striking a nerve: the company reported moving 350,000 units of the Eee in the first quarter it was available last fall.

Sony's not the only one taking notice. Acer is reportedly readying an Eee competitor, and the yet-to-be-officially-announced HP Compaq 2133 was developed with the Eee firmly in mind.

As for Sony, though it did start offering lower-priced notebooks last year in the $800 range, don't expect the company to go any lower just yet. Abary says so far the company is just "keeping an eye" on the Eee's activity.

Sony has always positioned itself as a premium brand, and will continue to do so, as was evident in the rest of its PC offerings on show here.

A Vaio to match your crocodile-print shoes.

(Credit: Erica Ogg/CNET News.com)

The company has been at the forefront of the uber-personalization trend that's taken over the notebook industry. By charging more, the company has more leeway with the options it can offer customers. It began doing colored laptops three years ago and is now branching out into personalized patterns, and--as suspected--textures.

People who buy their Vaio at the SonyStyle store online have as many as 36 different choices for personalizing their laptop. The Graphic Splash line has three different patterns and multiple color combinations, as well as a choice of font on the keyboard. "That's what consumers really, really want," Abary told a gathering of reporters earlier in the day.

Sony also said that Vaio as a brand sells particularly well with women, which could also explain Sony's increased emphasis on personalization. Though 80 percent of notebooks sold industrywide are owned by men, Abary estimated, Vaios' percentage ownership by men is in the low 70s, indicating a higher-than-average ownership rate by women.

But it's not all about appearances. Sony is also pushing its lineup of home theater PCs, which are not primary PCs, but still start at $1,699.

The TP series home theater PC is now a Blu-ray player too.

(Credit: Erica Ogg/CNET News.com)

Though Sony had earlier indicated that its TP home theater PC (that white round one), didn't sell particularly well last year, it still decided to bring it back for Round 2. It's still round, but now it's got some high-definition guts. Sony beefed it up with a Blu-ray Disc player, Intel Penryn processors, and two Cable Card tuners. It's also now available in black for $1,699 to $3,000.

Though it was released in the fall, the all-in-one PC from Sony, the LT, is part of the same strategy. Again, though it's a PC like Gateway's One or Dell's XPS One, Sony positions the product as a TV with PC capability instead of the other way around. Doing so is likely to lure more high-end customers, with the LT's Bravia-like bezel echoing Sony's line of LCD TVs.