Sony looks to revive PC business

According to a report this week from research firm ARS, the consumer electronics giant has a half-dozen PCs in the works that will target the middle and high-end of the market. ARS gleaned details about the machines, which will range in price from $799 to $2,199, from e-commerce Web sites such as TechDepot.com and YesMicro.com.

ARS desktop PC analyst Toni Duboise wrote in a report this week that Sony is focusing on providing more features and performance, while also experimenting with a previously successful entry-level product.

"ARS still feels that Sony's rare appearance in the sub-$800 category will not go unrewarded," Duboise wrote. "Although not all model specifications were attainable from the e-tailer Web sites, all six of Sony's models appear to exude the manufacturer's performance mantra with dual optical drives and (significant amounts of) memory and hard drive options."

Eschewing the low end of the market is a familiar stance for Sony--and one that has helped it maintain revenue even as its market share has slipped. According to research firm IDC, Sony shipped 790,000 units in the fourth quarter of 2002, down from 1.03 million during the same period the year before.

"They have had more of a dip than their competitors," said IDC analyst Roger Kay. "They've had a string of down quarters."

Sony representatives did not return calls seeking comment on the new desktops. But in a previous interview with CNET News.com, Hideyuki Furumi, director of desktop marketing at Sony, explained the company's strategy.

"Our goal is not to achieve 40 percent of the market, but we don't want to lose share, either," said Furumi. "We won't do anything crazy to gain 10 percent...gaining share is important, but creating a philosophy is equally important."

As part of that philosophy, Sony has been promoting its "ubiquitous value network" strategy, in which it espouses the value of bringing together of content and hardware. Sony has vast holdings in the music and entertainment industries.

Lowering prices on PC systems to gain market share has been a successful strategy for some of the PC industry heavyweights, such as Dell Computer and Hewlett-Packard, but it's not one that Sony has fully embraced.

"The emergence of the low price-band really lowered the industry average price," Furumi said about growing number of $499 PCs. "Our lowest-end units don't always sell well; we sell better in the high end."

Furumi noted that Sony's hesitation to offer an entry-level PC late last year was a "little miscalculation in timing" that was partly to blame for the company's loss of market share.

"That was probably one of the biggest reasons why we did not increase volume, but while we're down in market share, our value share in terms of dollars remains the same," said Furumi. Value share is the amount of revenue made per unit.

At the lower end of the price spectrum, Sony will offer:

• The PCV-RS310, $899, with a 2.4GHz Pentium 4 processor, 256MB of memory, an 80GB hard drive, a DVD-RW drive and a CD-RW drive.

• The PCV-RS320, $1,099, with a 2.6GHz Pentium 4 processor, 512MB of memory, a 120GB hard drive, a DVD-RW drive and a CD-RW drive.

• The PCV-RZ32G, $1,399, with a 2.6GHz Pentium 4 processor, 512MB of memory, an 80GB hard drive, a DVD+RW/-RW drive and a CD-RW drive.

• The PCV-RZ34G, $1,699, with a 2.8GHz Pentium 4 processor, 512MB of memory, a 120GB hard drive, a DVD+RW/-RW drive and a CD-RW drive.

Those four systems will be discounted via a $100 rebate.

Sony also is releasing two systems that don't carry the rebate. The PCV-RZ36G, priced at $2,199, will come with a 3.0GHz Pentium 4 processor, 1GB of memory, a 160GB hard drive, a DVD+RW/-RW drive and a CD-RW drive. The PCV-W30, $1,599, is an update of Sony's W Series and features a 2.0GHz Pentium 4 processor, 512MB of memory, an 80GB hard drive, a DVD-ROM drive and a CD-RW drive.