Sony's eVilla dips into "poisoned well"

SAN FRANCISCO--One way of looking at Sony's launch of the eVilla is that the consumer electronics giant is late to a party that everyone else left because they weren't having fun.

At the very least, Thursday's launch of an Internet appliance runs counter to conventional wisdom.

In the 18 months that Sony has been developing the Web-surfing device, a number of other companies have entered and pulled back from the market, including 3Com, Netpliance and Gateway, which still sells its America Online-powered unit but is rethinking its plans.

And although market researchers remain optimistic about prospects for Internet appliances in a broad sense, analysts have pared expectations for devices that, like eVilla, resemble a desktop PC but are designed almost exclusively for Web-surfing and e-mail.

Market researcher IDC now sees shipments of such Web terminals reaching 2.7 million units a year by 2005, down from an earlier forecast that 5.5 million devices would ship in 2004. About 150,000 such devices shipped in the United States last year.

"We recognize it's been a bumpy road," Sony general manager Rob Bartels said, speaking at a launch event at Sony's Metreon upscale mall here.

Sony debuts eVilla Jim Neal, eVilla manager, Sony

Nonetheless, Bartels said, Sony is optimistic that it can sell the $500 device, which requires a $21.95 monthly Internet service that is sold under the Sony brand but is handled by EarthLink. The unit is on sale at the Sony Style online store. It will show up on some retail shelves by the end of the month, Sony said, although the company would not identify which stores will carry the device.

"It's just unfortunate the well has been poisoned," Sony marketing manager James Neal said, referring to the various companies that quickly jumped in and out of the Net appliance market.

Analysts say eVilla, like its predecessors, is going to be a tough sale.

IDC analyst Bryan Ma said companies that sell Internet appliances make the case that the PC is like a Swiss Army knife, pretty good at many tasks. By contrast, Net appliances are pitched as specialized tools, like a butcher knife or a pair of pliers. But Ma said that, thus far, most Web terminals have not delivered on the promise.

"You end up getting a plastic butter knife," Ma said.

Sony first unveiled eVilla at January's Consumer Electronics Show in Las Vegas, but twice pushed back the launch to try to line up more content partners.

The unit uses Be's BeIA operating system, National Semiconductor's Geode processor, and a Sony Trinitron monitor that is positioned lengthwise, a move Sony said helps alleviate the need to scroll as much while browsing the Web. The off-white device includes Real Networks' RealPlayer software and supports Java and Macromedia's Flash. eVilla also offers the ability to read and send e-mail with Microsoft Office attachments. There are two USB ports for connecting to a printer and a Zip drive.

The eVilla does have some features that make it different from other devices on the market.

Like Netpliance's I-opener, eVilla will automatically go online during off-hours to grab e-mail and news so that the device can be used to some degree without tying up a phone line to dial into the Internet. In eVilla's case, the device goes online once a night to grab content--at a time set by the owner.

A built-in Memory Stick reader allows eVilla owners to open and send photos and music files stored on the flash-memory card that is shaped like a stick of gum. MP3 music files downloaded from the Internet using eVilla can also be played on Sony's Clie handheld computer, although not with its Memory Stick Walkman, which relies on a different, copy-protected format for storing music.

Sony said eVilla owners will be able to use their Internet service accounts on a PC for no extra charge, although current EarthLink customers will still have to switch to an eVilla account to avoid paying double fees.

In large part, though, sales of eVilla will depend on whether Sony is able to use its marketing might to sell consumers on the idea of a "network entertainment center" as an alternative to buying a second PC.

Sony also appears to be preparing for an eVilla sequel, a unit that will have always-on, fast access to the Internet. The unit already has an Ethernet port and the necessary hardware for such access, and Sony executives said Thursday they hope to have broadband service available by October.

At that point, the company hopes to tie in more directly with other Sony units, such as the company's record label and movie studio, to heighten the entertainment focus of the device.