TOKYO - Sony's new online
service connecting the whole range of its gadgets to downloadable content
like movies and games should help build brand loyalty, a top executive
said Friday.
Executive Vice President
Kazuo Hirai said the service, set for launch next year, highlights an
advantage that Sony has over rivals like Samsung Electronics Co. and other
manufacturers that don't produce their own content. Sony's business empire
spans gaming, electronics, movies and music.
"That's the kind of
combination that I think is not seen anywhere else," Hirai said in an
interview at Tokyo headquarters. "That I think is where our core
competence lies, and that's a differentiator for Sony."
The online service will
include games, movie downloads and other interactive entertainment, which
will be accessible on Sony products, such as Bravia TVs, Cyber-shot
digital cameras and Reader electronic books.
But Kazuharu Miura,
analyst with Daiwa Securities SMBC in Tokyo, said it was unclear whether
online services will boost gadget sales.
"I understand what
Sony is trying to do, and that's the best way to showcase its
strengths," he said. "But whether that will really get people to
buy a Sony camera or a Vaio computer all depends on what Sony does with
the online service."
Hirai said Sony already
offers streaming video, comic delivery and a news service, but could
expand into any of the gamut of services available for personal computers,
such as fitness and financial services.
Sony is targeting annual
sales of 300 billion yen ($3.4 billion) from its networked services
businesses and 350 million network-connected products by the fiscal year
ending March 2013.
Sony's service for
PlayStation 3 video game machines, which began three years ago, has
attracted 33 million users. The new service will be expanded to other Sony
products.
In outlining a turnaround
strategy Thursday, Chief Executive Howard Stringer flagged network
services as a major area where Sony hopes to grow, as well as 3-D TVs, new
displays, electronic books and batteries for cars.
Sony is expecting its
second straight annual loss for the fiscal year through March 2010 —
hurt by sliding prices, the global slowdown and the absence of
blockbusters products like Apple Inc.'s iPod or Nintendo Co.'s Wii.
It has fallen behind in
liquid-crystal display TVs to Samsung of South Korea and Japanese rival
Sharp Corp. Sony is hoping to be profitable in that business by the fiscal
year ending March 2011.
Hirai, who oversees games
and network services, acknowledged Sony's units didn't communicate well in
the past to coordinate their strengths.
That has changed under
Stringer, he said. Stringer appointed a new management team earlier this
year, including Hirai.
Hirai said the planned
service was a chance to one-up rivals at a time when products are becoming
commodities, with prices being the big way to compete.
"We want to increase
the value, or the brand loyalty of our Sony products. There is no question
about it," he said.
Sony has a long way to go
before a full recovery.
The maker of the Walkman
portable player expects a 95 billion yen ($1 billion) loss for the fiscal
year through March 2010 — marginally better than the 98.9 billion yen
loss the previous fiscal year, its first annual loss in 14 years.