Sony's Nishida Outlines `eSony' Plans

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NEW YORK - Sony Electronics' newly appointed president Fujio Nishida outlined his strategy to take the company toward an "eSony" business model, which would place a greater emphasis on Internet and broadband technologies.

Nishida, a 28-year company veteran who has been based in the United States since 1996 and most recently was president of Sony Electronics' Consumer Electronics Group, discussed the industry with the press at the Sony Building, here, for the first time in his new post.

In his opening remarks Nishida said, "Our challenge is convergence, between service and hardware businesses and between audio/video and IT [computers]. We can't continue the traditional business of [just] selling hardware products."

Mentioning Sony chairman Nobuyki Idei in describing the concept of "eSony," it was clear that Nishida is a disciple of his CEO's vision. "We must get involved in e-based businesses," he said, "and we must make it happen quickly."

Of all the markets that Sony Corp. competes in, Nishida believes "the United States has a better environment and a strong infrastructure to make this work. Maybe we can lead here."

Nishida said the company has four areas where it can convert itself into "eSony" and make an impact:

  • · Computers, with its Vaio line, which will continue to stress the entertainment value of PCs.
  • · TV set-top boxes for digital TV, WebTV, home satellite or "a combination of two or three that can be used as a catalyst for convergence."
  • · PlayStation2, with game-playing, DVD movie and Internet-browsing.
  • · And mobile electronics, using the company's first PDA -- which will be introduced at PC Expo -- later this month and other products in development that could accept streaming video from the Web, among other features.

"We cannot create eBusiness overnight, but it is possible" to do it soon, Nishida said, which was his way of introducing Woody Deguchi, business development manager for personal audio. Deguchi demonstrated the prototype Emarker system, a radio that can fit on a key chain. He described the Emarker as a "real world/cyberworld bridge" and explained that it's a time-stamping device.

Consumers would register on the Emarker website and list local radio stations they listen to. If they are listening to an Emarker radio, when they like a song they push a button if they want to buy it. The device is later attached to a PC using a USB port to access the Emarker site, see how much the CD or music file is, and buy it through an e-tailer.

"This solves the shopping problem of not being able to remember what you heard," Deguchi said. The service is free to consumers, and both Deguchi and Nishida said that the hardware would "hopefully" be less than $100, but there was no word as to when this might come to market. Emarker could be built into all types of audio products, both executives said.

Another practical example of hardware accessing the Internet is MiniDisc. Nishida said the format currently cannot download digital music, but it will be able to with a new USB plug designed for MD recorders -- although the downloads from the PC to the MD would be analog and in real time.

Sony is packaging the cable with new MD portable recorders. The MZR37SPPC recorder is available this month for a suggested retail of $249, while the MZR70PC is priced at $199 and available in July.

The most obvious way Sony can jump into eBusiness is e-tailing. Nishida said that currently about 20 retailers have been approved, either click & mortar or e-tailing-only sites.

"We never thought that e-tailing for audio/video products would replace [brick & mortar] stores, only supplement them," he said. But he added, "Consumers are using them, they have more choices, and we agree to give them more options."

Sony has learned that certain retailers are good at selling different products, said Nishida: "Crutchfield is good at audio, and TV. is good at portable products and audio/video. Circuit City uses it for convenience and information."

As for Sony's plans to sell direct to consumers, the company will continue to sell computers, PC and CE accessories, camcorders and digital cameras, he said. But during the next 12 months, "we are definitely thinking of expanding the number of categories on a gradual basis."


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