September 13, 2006 8:44 AM PDT
Fall electronics to rally Sony?
The U.S. division of the Japanese electronics giant next month plans to start shipping a personal-communication device called Mylo and an electronic book called the Sony Reader, Sony Electronics President Stan Glasgow said during a San Francisco interview with a few reporters Tuesday.
The two devices are part of an effort by Sony to test the waters on new device categories. The company also plans to ship its first Blu-ray players for the U.S. market.
Meanwhile, the company is gearing up for what could be a fairly healthy holiday season for electronics, driven primarily by high-definition TVs, that could help the company recover some of the ground it has lost.
"More than 50 percent of the TVs purchased this year will be high definition," Glasgow said. "We could see a reasonably strong holiday season. I'm hoping for double-digit growth for Sony Electronics in the U.S. I don't think the industry will grow at that level."
The projections for double-digit growth do not include sales of the PlayStation 3, he added, which come out of a different Sony division.
Success with any of these products would be welcomed warmly by Sony, which has stumbled badly in the last two years. Among other gaffes, the company angered consumers with a digital rights management scheme on its MP3 players, had to delay the PlayStation 3 launch in Europe because of a shortage of blue diodes and has agreed to help pay for a massive notebook recall. The problem: lithium ion batteries from Sony that can in certain circumstances catch fire.
Mylo, which will be pitched at college students, is sort of like a smart phone without cellular. It will come bundled with a few different messaging services and Wi-Fi. Users will be able to call through voice over Internet Protocol (VoIP), troll the Web and store music on the device. In a sense, it is similar to the Nokia 7700, which also does not come with cellular but has the rest of the features of Mylo.
Mylo, Glasgow added, was designed in the United States. It's not a Japanese export.
The Sony Reader, meanwhile, sounds like what it is: it's a thin booklike device for reading. Electronic books have flopped in the past, but Sony has tried to eliminate some of the bugs from the overall design. For one thing, the Reader is slimmer and smaller than past attempts from other manufacturers.
The company is also trying to make sure that there won't be a shortage of titles. In conjunction with the release of the device, Sony plans to open an online bookstore with about 10,000 titles, Glasgow said.
The major thrust for the year and in the near future, however, will be in high-definition products like liquid crystal display (LCD) televisions and Blu-ray players.
Sony's first Blu-ray player for the states will come out next month and sell for $999. At that price, it's only for cinephiles, but the price will come down rapidly.
"We're a year off from a rational price," he said, adding that $499 would be rational.
At $999, the Blu-ray player will also cost several hundred dollars more than the PlayStation 3, which will include a bare-bones Blu-ray drive. The home system will have more options.
The shortage of blue diodes will also not likely impact the home player. "The PlayStation 3 is a huge-volume product. It will be in the millions," Glasgow said. "The player is in the tens of thousands."
Just don't expect to see a player of Blu-ray and HD DVD formats from Sony any time soon. The costs of building one drive or player that could support the rival formats is prohibitive, Glasgow said.
Sony's various divisions are better coordinated than in the past, Glasgow said. Years ago, "there would be different divisions producing similar products," he said. Things are more streamlined. The groups also work together more effectively to market each other's products. Sony Electronics, for instance, has one of its employees sit in on the script meetings at Sony Pictures to see if there are cross-promotional possibilities.
One product category Sony will continue pushing is high-definition camcorders By the end of next year, the video cameras should grow in numbers and sell for $700 to $800, Glasgow predicted. Panasonic has issued similar projections.
Sony likely has lower ambitions for LocationFree TV. LocationFree devices, which let consumers access stored TV content on a home server when on the road, have not sold as well as expected. Nonetheless, the place-shifting concept is still attractive, and Sony may try to insert the capability into other devices.As for catching up with Apple Computer and others in the battle for MP3 player market share, Glasgow asserted that catching up would be tough. "I wouldn't say the game is over, but it's late in the game," he said.
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