Sony's Recipe: One Part Hardware, One Part Software

In Japan, champon is a popular stew brimming with makings that eventually come together in robust harmony. Right now, Sony Corp. boasts a fuller cupboard of ingredients than any other company trying to cook up a digital stew.

No one can deny Sony's strengths in compact disks, integrated circuits, and audio and video hardware. It also excels in making electronics that are portable and user-friendly. But Sony is trying for another edge in the digital future--by selling the latest gadgets as well as the software they use. The digital future is simply "computing plus entertainment," says Michael P. Schulhof, vice-chairman of Sony Corp. of America. So the key software is movies and music, which is one reason why Sony bought Columbia Pictures Inc. and CBS Records Inc. "I spent $8 billion of Sony's money developing this strategy," says Shulhof. The result? "We're the best-positioned company in the world." Indeed, only rival Matsushita Electric Industrial Co., owner of MCA Inc., now comes close to matching Sony's mix of digital hardware and entertainment software.

It all comes together in a series of interactive gadgets equipped with optical disks storing images with full color, motion, and sound. The machines will do much more. "Our new CD medium will be used for everything: entertainment, computing, data storage, and telecommunications," says Nobuyuki Idei, a Sony board member.

Idei figures the technology will evolve over 10 years. In the meantime, Sony is focusing on what Ron Sommer, president of Sony America, calls the "three P's" of the digital revolution: personal entertainment, personal information, and personal communications. The first gadget is Data Discman, a hand-held electronic book player. About 200,000 have been sold in two years.

Data Discman's forte isn't flipping electronic pages in the latest potboiler but helping dig information out of reference tomes. Now, when a technician from Northern Telecom Ltd. makes a call, a Data Discman goes along, carrying the equivalent of 18,000 pages of manuals on disk. By using keywords, technicians instantly flip to the "page" describing the repair procedure.

OUTTAKES. More digital gadgets are due out this fall, including the "Bookman," a more powerful electronic book player. Also coming soon are the first digital spin-offs from Sony's entertainment group: CD-ROM-based video games. This is where owning a movie studio is beginning to give Sony an edge, says Olaf Olafsson, president of Sony Electronic Publishing Co. While producing movies, he says, Sony can shoot extra footage for use in interactive video games. The technique is being tried with Dracula, a fall film release, and with Columbia Television's production of Journey to the Center of the Earth.

But entertainment alone does not a digital future make. Despite numerous attempts, Sony has never succeeded in computers or telecommunications. "Of course, we have to learn a lot about computers and processors," says Idei. To help in telecommunications, Olafsson says Sony would like to work out a partnership with a phone company. Even a master chef needs help in cooking up a digital stew.

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