Sony Shows New Piece of its Digital Media Strategy.(Product Announcement)

Sony Japan previewed some of its strategy for linking home digital media appliances to each other and the web when it showed a digital video recorder (DVR) called the Channel Server CSV-E77 with a 160GB hard disk, two TV tuners and more functional user software. It's the first of what Sony calls its Cocoon digital media line that it hopes will be an alternative to the PC for accessing the Internet and networking at home. Available November 1 but only in Japan, Channel Server's expected retail price will initially be about $1,100. "What It Isn't" Is Strategically as Important as "What It Is" 1.Channel Server isn't based on SonicBlue's ReplayTV or Tivo's technology. Sony was very careful in pointing out what it perceived as two advantages over Tivo: Channel Server's broadband connection (which newer Tivo models also have) and larger storage capacity (a matter of which hard disk the manufacturer puts in the box).

2.It does not use any Microsoft operating system or application software. Sony's operating system is MontaVista Software's embedded Linux 2.4.17. By embedding the OS in the hardware, electronic devices like the Sony Channel Server CSV-E77 run faster because the computer doesn't have to wait for the hard disk to spin around and load software into memory - it's already in memory, and since there is no disk drive, the unit can be smaller and cheaper. (See http://www.mvista.com and http://foldoc.doc.ic.ac.uk/foldoc/foldoc.cgi?query=embedded+system) It's well known that Sony and Microsoft increasingly consider themselves competitors. The rivalry increased substantially when Microsoft introduced its Xbox game console into a market that Sony with its PlayStation product considered its own turf.

3.Intel is not supplying the microprocessor for the Sony Channel Server CSV-E77. It uses a Mips Technologies' chip running at 350MHz.

Microsoft and Intel have taken almost all of the profits from PC makers. HP, IBM and Gateway have admitted that they lose money in their consumer PC operations. Even Dell, which seems to be able to make money at everything it does, is probably hard pressed to produce significant profits on its home PC sales especially if SOHO sales are excluded.

4.Sony didn't include software that would permit the Channel Server CSV-E77's Ethernet port to be used to copy video files to a PC. And there is no Firewire (IEEE1394) wireless port that would also have permitted files to be transferred to a PC. Sony did not disclose its plans for connecting the device to a home digital media network. Sony is one of the world's largest content producers with its music and movie properties so piracy protection is as important to Sony as selling home appliances.

Sony's president said, "Until now our home network strategy has been PC-centered, but in the broadband era, in addition to ...