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9/4/2007
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Sony's Got iPod Envy

The company's media push reflects efforts begun by Sony CEO Howard Stringer in 2005 to restore Sony's leadership in consumer technology.

A day before Apple's expected announcement of new iPods, Sony's iPod envy is getting prominent play in the press.

Sony is planning to challenge Apple in the video download market, according to reports in The Wall Street Journal and elsewhere. The consumer electronics giant plans to regain ground lost to Apple by using its PlayStation 3 and PlayStation Portable video game systems, as well as its Bravia line of HD televisions, in conjunction with as-yet-undisclosed software, to let consumers purchase and download movies online.

A Sony spokesperson was not immediately available to elaborate on the plan.

Sony last week said that it was phasing out its CONNECT Music Service in the U.S. and Canada and abandoning its proprietary ATRAC music format in favor of Microsoft's Windows Media Technology platform and its PlaysForSure DRM. The company launched CONNECT in 2004 to compete with Apple's iTunes Store but the service never connected with consumers.

The moves reflect efforts begun by Sony CEO Howard Stringer in 2005 to restore Sony's leadership in consumer technology.

The video download market remains largely an unfulfilled promise. Market research firm Park Associates last month said that few consumers were satisfied with the video download experience. Sixteen percent of consumers surveyed by the firm said the selection of videos available online was good and 13% found the prices reasonable. Perhaps more significantly, less than one in five consumers who had downloaded video said they'd do so again.

Consumer disappointment may be contributing to the slow sales of Apple TV, Apple's set-top box for online video. Cynthia Brumfield, founder and president of media consultancy Emerging Media Dynamics, estimates that as of July, Apple had only sold several hundred thousand Apple TV units. Apple has yet to disclose an official sales figure for Apple TV.

Still, Sony has its work cut out for it. Apple claims that iTunes is the leading video download service and the company's upcoming iPods will almost certainly add to that lead. And that's to say nothing of Microsoft or Amazon, both of which are formidable competitors with designs on the video download market.

But if Sony can build a compelling video purchase experience, it may find that building online video purchase, transmission, and storage into its televisions gives it a real advantage: Anything that simplifies the still-cumbersome process of connecting TVs to the Internet and buying videos online is likely to be well-received by consumers.

For Apple, Sony's ambition for its Bravias suggests that Apple TV might have been better off as an Internet-capable television rather than Wi-Fi hard disk storage unit for video.

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