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Sony edges toward broadband wireless

The entertainment company takes an $8 million stake in ArrayComm with an eye toward offering high-speed wireless access to Sony's library of music, videos and computer games.

Sony is taking an $8 million stake in wireless start-up ArrayComm with an eye toward offering high-speed wireless access to the entertainment giant's library of music, videos and computer games, the companies said today.

The move adds a puzzle piece--if a tentative one--in Sony's drive to revitalize its business by refocusing on Internet distribution.

ArrayComm has set its sights on building a new nationwide high-speed wireless network in conjunction with retail partners such as Sony and with mobile phone carriers.

Sony could, in turn, create wireless devices that would access the network to play games, listen to music or watch videos, such as the device it has already committed to creating with Palm Computing.

"Sony doesn't care what happens on the technology side. They're interested in expanding their platform and services," said Herschel Shosteck, chief executive of analyst firm Herschel Shosteck Associates. "So any kind of wireless technology that can enable this is something they'll be interested in."

Sony has been moving quickly to reorganize itself around delivering content over the Net.

Late last month, the company said it will merge its separate American film, music and online entertainment divisions into a single entity dubbed Sony Broadband Entertainment. A separate restructuring effort will target its consumer electronics division.

In Japan, the company is moving even more explicitly into the network business, saying today that it will provide local broadband wireless Internet access to compete with the dominant local phone company.

The ArrayComm investment Wireless takes center stagepushes the company a step closer toward having a relationship with network operators in the United States.

"Sony's investment...represents an opportunity for us to propel the development of a technology that will enable the delivery of new, media-rich wireless services built around our own core content and technologies," said Yang Hun Lee, executive vice president at Sony Corp. of America.

The funds also mark a long step forward for the ambitious ArrayComm, a wireless infrastructure firm that offers technology it says can dramatically improve download speeds in wireless networks.

Headed by Martin Cooper, the former Motorola executive who led that company's development of the first mobile phones, ArrayComm has outlined plans to create a nationwide data network with the help of media and mobile phone carrier partners. That high-speed network will be used to distribute digital products such as movies or music, Cooper has said.

Sony's investment, along with another $7 million from Amerindo Investment Advisors and Ballentine Capital Partners, provides the first link in that chain.

But to realize the full ambition will be far more expensive. ArrayComm still must follow through on promises to sign a mobile phone carrier that can construct its wireless infrastructure and that will have the wireless spectrum needed to carry services such as connecting to Sony's content.