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Sony looks under the Christmas tree

Americans will go gadget shopping this holiday season, even if oil prices go up, Sony execs say.

SAN FRANCISCO--Sony is hoping for a moderately merry Christmas.

Fancy televisions should help propel sales during the holiday shopping season, despite recent turbulence in the U.S. economy, Sony executives said Wednesday in a meeting here with reporters.

"It won't be the best in the history of the U.S., but it will be good solid growth," said Stan Glasgow, president of consumer and commercial audiovisual IT sales at Sony Electronics. Nonetheless, he added that higher oil prices are going to "have an effect on lower-income families."

How strong the holiday shopping season will be is one of the looming questions for the technology industry, and the answer depends on whom you ask. Apple Computer on Wednesday raised its revenue forecast for its current quarter, which ends in December, to $2.89 billion, after exceeding analysts' expectations and shipping 2 million iPods in the previous quarter.

By contrast, chipmaker Intel said Tuesday that its own sales will grow a little less than normal in the coming quarter because of inventory overhang.

At the press meeting, Sony, which has had to endure layoffs and a wave of new competitors entering its core markets, outlined the several steps it is taking to fend off the competition.

For instance, it has created Sony stores-within-a-store at 25 CompUSA retail locations. It also plans to erect displays in 250 Circuit City outlets nationwide to promote its Wega-brand home theater equipment. Similar promotions will take place at Best Buy and Wal-Mart.

"We think the display products will be the hit of the holiday season," Glasgow said.

In addition, the proliferation of high-definition TV programming from broadcasters looks likely to drive sales of digital TVs. Seven million HD sets have been bought in the United States this year, and 11 million are expected to sell next year, said Mike Fidler, senior vice president of Sony's home products division. The Japanese company plans to link up with cable operators to offer $100 discounts to customers who sign up for HDTV packages.

Sony will use the holiday season and the succeeding months to plug its Qualia line of upscale electronic devices. The Qualia brand will be applied to products at the "extreme" high end, with a heavy emphasis on design and cutting-edge technology, said Dick Komiyama, president and chief operating officer of Sony Electronics.

The company's Qualia 006 projection TV, for example, features a new LED (light-emitting diode) backlighting system for better picture quality. The 70-inch-screen set will come out in January and will cost under $10,000.

A Qualia-branded digital camera will be about the size of a thumb. It will come with a variety of attachable lenses, a flash and other options. The whole package will cost $3,900 and come in its own leather briefcase.

The company started selling Qualia-branded products last month in a Sony store in New York. Similarly, Samsung has created a separate brand for showcase products.

Another Sony product heading for the U.S. market is a "location aware" TV, a portable TV that can also be used to surf the Internet. In Japan, it is known as the Airboard.

Sony will also release home servers with around 250GB and 500GB of storage for the U.S. market, Fidler said. Last week, it showed off a 1 terabyte home server for the Japanese market.

Glasgow added that the company plans to expand its Sony Style stores in the United States. An outlet is set to open in Caesars Palace next week. By the end of the current fiscal year, which ends next March, Sony expects to have 15 U.S. stores.

Retailers so far have not complained about competition from the Sony-owned stores, as the prices are generally higher in those outlets, Glasgow said. The stores largely exist to familiarize consumers with the different Sony products, he added.