Sony reorganizes struggling Connect service

Electronics giant's iTunes rival will be tied more closely to portable audio division.

Sony said Friday that it will strengthen ties between its portable audio division and the struggling Connect digital music download unit, an iTunes rival launched in early 2004.

The Connect service was Sony's entry into the digital music market that was, and still is, dominated by Apple Computer's iTunes. However, since its launch, Connect has gained little traction with consumers, while Sony's portable audio players have been overshadowed by the explosive success of Apple's iPod.

The download unit, now renamed the Connect Business Division, will be placed officially under Hiroshi Yoshioka, who oversees the portable audio division. In that position, Yoshioka will be "best placed to reallocate resources and promote both the portable audio and content distribution business," a representative said in an e-mail.

Sony has felt Apple's rise in the portable audio business particularly keenly, given that it was its own Walkman line of products that essentially invented the space beginning in 1979.

Analysts have said Sony has been hampered in part by the different goals of different divisions, such as the desire of the content companies to protect their music and movies from piracy, and the electronics division's stake in technologies such as the MiniDisc and the Memory Stick.

Connect has long been expected to move into new types of content, such as video and downloadable games, and to play a more prominent role in the company's Net strategy. A first installment was announced early this month, in the form of a relationship with the new Starz Vongo video-on-demand service, which will be distributed by Sony.

The service will also begin selling downloadable eBooks, for customers of the company's new Portable Reader, Sony said at the recent Consumer Electronics Show.

Sony is still in the midst of a broad companywide reorganization aimed at improving communication across units, and turning around several years of seeing its products lose ground to rivals like the iPod.

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