Software split offers Sony price edge
The giant splits the difference with competing software products from Corel and Microsoft. It's all about price, Sony says.
The Japanese company, which has emerged as the fastest growing major PC maker in the world, is bundling Corel's inexpensive WordPerfect 2002 suite--a collection of software applications that includes spreadsheet and word processing programs--on all of its desktops. In turn, the company is offering Office XP or Microsoft Word 2002 on all of its notebooks.
Desktops sold through Sony's Web site come with Corel software as a default, although owners can replace the package with Microsoft XP Professional for an extra $470. Corel software, however, is not offered for Sony notebooks; instead, a choice of Office XP Professional, Office XP standard, or Microsoft Word 2002 is offered.
With the decision, Sony can better compete on price and offer consumers the more familiar Microsoft software in a market where price issues aren't a main priority. Sony has already been selling computers with Corel software in the past, but with the new fall line released this week, has made the software its default standard for desktops.
"It is a very interesting twist. It all comes down to pinching pennies," said Toni Duboise, a retail analyst at research firm ARS. "They are cutting costs where they can."
Sony is more interested in promoting a host of multimedia software it has developed for PCs, she added. Features including Click to DVD, for DVD recording and management, and Sony Vaio Media, for file sharing within a home network, will compete against Microsoft's Windows XP Media Center Edition and similar software from Apple Computer.
Sony representatives acknowledged the changes but did not explain the reason for the split.
Outside the Office
Microsoft Office has remained the leading application software product for years, yet it's expensive. The full, standard version of Office XP sells for around $429, while the professional version sells for $579. A budget PC without a monitor from Emachines or Hewlett Packard can often cost less.
As a result, PC manufacturers have explored customer interest for cheaper software alternatives. Last month, HP began to bundle Corel software in its Pavilion line of PCs, while Toshiba featured IBM's SmartSuite on certain laptops.
Technically, Corel's WordPerfect software package sells for nearly as much as Microsoft software, but the company licenses it to PC makers who bundle it on desktops for minimal fees, according to sources. Corel executives said they didn't expect some of these recent bundling deals to have a major impact on revenue during a recent conference call.
The price savings can be demonstrated on Sony's site. The Sony RZ16G, which comes with a 2.66GHz Pentium 4 and 512GB of memory sells for $1,999 with Corel WordPerfect, or $2,469 with XP Professional--a difference of $470. The $699 RZ-10C goes from $699 to $1,169 when WordPerfect is substituted for XP Professional.
The notebook market, however, is far less sensitive to pricing than the desktop segment. The Sony Vaio PCG GRX 500 notebook--which comes with a 1.5GHz Pentium 4, a 15-inch screen, a 20GB hard drive and 256MB of memory--sells for $1,599 with Microsoft Word 2002. Upgrading to Office XP home increases the price to $1,849.
Multimedia fandango
Sony soon will likely bring more attention to its own software offerings. Like Apple, Sony initially focused on differentiating its products through original designs. But over the past year and a half, the company's concentration has shifted more to software.
Previously Sony used DVD burning software from Sonic Solutions on its PCs. The Sony Click to DVD offering improves the service as the software is simpler to use, the company says, and also includes more functions.
"The (recording) engine is from professional mastering systems," said Todd Titera, marketing manager for Vaio desktop PCs.
Sony plans to put the Click to DVD software on all its PCs with DVD burners, but has no plans of yet to license it, Titera said. Sony will continue to use Sonic software on standalone DVD drives, however.
Similarly, Sony Vaio Media will become the standard on all products. Vaio Media offers a pop-up menu of photos, videos and music that are available on a home network.
The vast majority of Sony PCs are sold to consumers. In the second quarter, the company saw worldwide shipments grow by 23.7 percent, according to figures issued by Gartner Dataquest in July.