Walkman plays catch-up

PUBLISHED : Friday, 11 March, 2005, 12:00am
UPDATED : Friday, 11 March, 2005, 12:00am

So Sony Corp is switching Walkman out of the pause mode. Or is it waking up to the iPod buzz?

The troubled Japanese electronics giant, which this week named a new chairman and chief executive, and its Swedish joint venture, Sony Ericsson, are staking a lot on newfangled handsets and an old name that used to carry a lot of cachet.

Four new mobile phones were unveiled by Sony Ericsson last week, one of which, the W800, is the company's first handset with a built-in Walkman music player.

The trade will have a chance to see the co-branded Walkman phone at CeBIT in Hanover, Germany, this week.

Sony is counting on the W800, the first in a long line of Walkman handsets, to revive the brand in the lucrative personal audio market. And it has scrambled to launch a series of cheaper Walkman music players in a bid to snatch its share of the market from Apple Computer.

But it has been 26 years since Walkman got the world moving to its beat, and the iconic brand - Sony MiniDiscs and portable CD players notwithstanding - has all but dropped off the radar screen of the portable music marketplace, now dominated by Apple.

Electronics industry analysts at iSuppli estimate iPod cornered 82 per cent of the digital music player market last year.

For a world-class player known for its technological innovation and brand leadership, Walkman's loss is a marketing blunder of Betamax proportions.

In a bid to improve the company's fortunes, Sony this week appointed a gaijin, Sir Howard Stringer, as its new chief executive, replacing Nobuyuki Idei.

In an unusual corporate departure, executives of the diversified conglomerate have taken to admitting to the group's failings.

Sony Computer Entertainment president Ken Kutaragi says the company failed to capitalise on the digital music scene, in part because of concerns over piracy and content rights.

'Even three years ago ... Sony was reluctant about introducing an iPod type of new product,' he says.

Sony's latest results show a consolidated operating profit of 138.17 billion yen ($10.34 billion) for the third quarter to December, down from 158.8 billion yen in the same period in the previous year. Sales fell 7.5 per cent to 2.15 trillion yen.

It blamed the decline in earnings on shrinking margins for consumer electronics products, soft demand for semiconductors and tough competition in the portable audio market.

In January, these factors led to the company cutting its group operating profit estimate for the year to March to 110 billion yen, down 31 per cent from its October forecast of 160 billion yen. It reduced its sales target by 2.7 per cent to 7.15 trillion yen.

Sony executive deputy president Katsumi Ihara admits: 'Our personal audio business is under a bit of pressure from the iPod boom. We have to turn things around.'

Enter the Walkman mobile phone, due to be in stores in the third quarter of the year.

Sony Ericsson is hoping the Walkman name will give it the edge against rivals such as Nokia, Motorola and Samsung in a global market that technology analysts Gartner says absorbed 674 million handsets last year.

Not that Sony Ericsson (or Walkman) will blaze the trail in 'mobile music' though. Motorola is planning to bring Apple's iTunes to its mobile phones while Nokia has announced a partnership with Microsoft Corp to combine digital music formats and Windows Audio Player.

Sony Ericsson would want its Walkman phones on the market before either Motorola iTunes or Nokia's Audio Player to ensure an early lead in the mobile music scene.

With a camera thrown in, the W800 will compete against rival music phones. But being effectively an MP3 player, it also looks set to take on standalone digital music players, especially the iPod.

Whether iPod users will tune in to the new phone, however, is uncertain as its 512-megabyte memory card has only enough capacity for about 150 songs, which is the same as the low-end iPod Shuffle but not enough to rival the higher-end iPod models. This is no unique selling proposition.

The Walkman brand alone is not enough for the W800 to blow iPod away. The new product will have to offer more compelling features to lure consumers.

And Sony will need a lot of soft sell if the languishing brand is to capture the imagination of today's mobile phone generation.

Walkman's pause has been such a long one the brand is now so last generation.

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