Sony looks to a future beyond PCs

Idei's speech here to the industry's largest event offered the clearest indication yet that Sony intends for its products to be a serious competitor to the PC in the networked world that Sony envisions.

The Internet, Idei said, is a meteorite that is reshaping the computing industry. Some companies will be crushed, while others will be able to take advantage of new businesses that arise from the ashes, he said.

Painting one of Sony's leading products into the picture, Kazuo "Kaz" Hirai, president of Sony Computer Entertainment America, added that "PlayStation 2 will revolutionize the what and how of the in-home entertainment experience." The age of standalone PCs will end with the arrival of Sony's Net-ready game console device next year, he proclaimed.

"PCs are pretty much confined today and mostly in the future to telephone-based, 'narrow-band' network," Hirai said. The PlayStation, meanwhile, is being built for electronic distribution of content through fast, "broadband" connections such as DSL and cable modems.

Content will help accelerate the deployment of these communications technologies into the homes of consumers, he added.

Idei said Sony "wants to be one of the top five companies in the broadband world." That Microsoft might be one of the companies that gets knocked off its perch as a result was a possibility at which Sony speakers hinted.

Sony paraded an unusual lineup of guests in front of attendees in an informal, living room setting on the stage of the Venetian Ballroom at the Sands Convention Center here. Among the 11 guests at the keynote were George Lucas, director of the popular Star Wars films, and various high-ranking Sony executives. The keynote also featured an animated version of Stuart Little, a character from the eponymous E.B. White book who is set to star in an upcoming film from Sony Pictures.

In a keynote that seemed at times more like a royal wedding than the usual company speech, the guests were intended to show how Sony is aiming to meld its content properties with homegrown technologies to produce compelling products for the broadband world Sony envisions.

Of the three doors to the networked world in Sony's hardware strategy--its Vaio PCs, digital TVs and set-top boxes, and the forthcoming PlayStation 2 entertainment console--Idei spent the most time on the PlayStation 2.

Idei took the occasion to advance his notion of "personal broadcasting." Basically, people are interested in documenting their lives, he said, but it is difficult to do that and share it with others. Sony wants to give consumers the tools to create video and upload it onto the network, he said.

Sony offered several demonstrations of its computing power. In addition to its high-quality graphics used in typical arcade games, Sony demonstrated birds flying in patterns based on a real-time simulation of their behavior that followed biological "rules." The company also touted the ability to share simulated worlds online using a PlayStation2, part of its "personal broadcasting effort."

Central to Sony's vision of a networked entertainment world is figuring out how to get consumers to use its audio and video recording devices in conjunction with other devices such as the PC and, eventually, the PlayStation.

Among the tools in this vein, Idei demonstrated a new camcorder available in January for $2,299, which records video onto a mini-disc. The device allows users to move and resequence shots, delete unwanted clips and add effects to video--all without the use of a PC. So far, the camera can only record about 20 minutes of material on each disc, however.

Representatives were also on hand to demonstrate a Sony notebook that has a digital camera built in to the lip, and how images can be quickly uploaded to an Internet site through a wireless connection.

New camcorders weren't the only technology given the spotlight. Sony had rock star Steve Vai strut on stage to play a solo that was then recorded onto Sony's Memory Stick technology. Memory Stick is a re-recordable storage medium that can save from 4 to 64 megabytes' worth of digital photos, data, music or other information in a single purple stick that's around 1.5 inches long and is about as thick as a piece of gum.

Sony executives popped the stick into a digital Walkman and played the song back over the speakers. They also showed off another new gadget called the Music Stick, which is a device the size of a large pen that can store up to 64 megabytes of digital music. That device will be available in January 2000 for an estimated price of $299. An even smaller device, dubbed "audio on a chip," is under development. It basically looks like the slim Memory Stick but can play back music directly to a set of headphones.

Idei talked about growth areas beyond the PC that were a logical offshoot of the Internet boom. Idei said he sees three effects resulting from the exploding popularity of the Internet. One is the growth of PC-based ecommerce activities--an area where the United States is the clear leader, he said. Another would be the development of mobile and broadband networks, where the United States is lagging compared to Japan and Europe, he warned. Lastly, he said the Internet has spurred development of non-PC networked devices.

The United States is under a "false impression" if it considers itself a leader in the era of non-PC networked devices, Idei cautioned. Japan, he said, is leading the way in this area, and he named Sony as the clear leader.

Sounding a note of conciliation, Idei said that all three of these developments require collaboration among companies in Japan, Europe and the United States.

Idei seemed to pitch Sony as an ideal partner for the non-PC world, saying that "Sony is an open business platform," seemingly a dig at Microsoft and the recent developments in its ongoing anitrust trail, where the judge has found the company to be a monopoly. Sony and Microsoft also engage in a number of business partnerships.

News.com's Michael Kanellos reported from Las Vegas and Jim Davis from San Francisco.