Sony 2003 Annual Report Download - page 11

Sony Corporation Annual Report 2003 9
We will be upgrading the key devices that are critical
to making these products attractive. One area w e plan
to augment is digital imaging components such as those
used in video cameras and digital still cameras, two
product lines w here Sony is highly competitive. Here, we
have used leading-edge Sony technology and devices
such as CCDs, camera modules and low-temperature
polysilicon LCDs to build a vertically integrated business
model capable of adding considerable value and pro-
ducing highly distinctive products. Best illustrating our
strengths is the CCD, where Sony leads the industry in
technological innovation and market share. We plan to
fabricate a greater share of key devices internally, giving
our products an even greater edge over our rivals.
Until now, for strategic reasons, Sony has purchased
LCDs, PDPs and other flat panel displays for televisions
from external suppliers. In recent years, however, we
have seen rapid growth in demand for flat panel televi-
sions, mostly those using LCDs, and have concluded
that the time has come to complement external sourc-
ing of LCDs with proactive investment on our own, or
through alliances w ith other companies. We are currently
examining possibilities. As before, we are continuing
our own research into organic electroluminescence
and field-emission displays, two candidates for next-
generation displays.
Initiative 2: Create an entirely new category
through the combination of Electronics and Game
In M ay 2003, Sony announced plans to sell PSX, the first
commercial product in which Electronics and Game con-
verge. Combining DVD and hard disk drive recorders,
PSX w ill spawn a completely new product category. PSX
will be based on the operating system and semiconduc-
tors used in PlayStation 2 (PS2), w ill have a television and
broadcast satellite tuner inside, and will be compatible
with PlayStation and PS2 games. Recording and playback
of television programs is just one of its many functions.
Users can also view still and moving images from digital
still and video cameras as well as enjoy music CDs. The
unit accepts a variety of home-use disc-based media as
well as the Memory Stick, and it can be linked to an
Ethernet network. PSX is slated to go on sale in Japan
late in 2003 and in the U.S. and Europe in 2004.
Inside PSX is technology from the Game and
Electronics segments. PS2 technology includes the
EmotionEngine and Graphics Synthesizer semiconduc-
tors as w ell as PS2’s operating system. Our Electronics
segment is the source of the semiconductor laser,
recordable DVD drive, codec (coding and decoding)
technology and many other sophisticated technologies
at the heart of PSX.
PSX is a fresh idea for an entirely new type of plat-
form where Electronics and Game technologies coalesce.
The incorporation of a DVD-Video playback capability in
PS2 has made the DVD format even more widely used
worldwide, sparking explosive growth in the DVD soft-
ware market. We expect that the DVD recorder inside
PSX w ill trigger similar growth in demand in the record-
able DVD market.
At the E3 (Electronic Entertainment Exposition), the
world’s largest game exhibition, held in Los Angeles in
May 2003, we announced our plan to sell PSP, a portable
entertainment system that is, in effect, a 21st Century
Walkman. PSP w ill be launched at a similar time in Japan,
the U.S. and Europe in late 2004. Sony Group’s leading-
edge semiconductor technology will, of course, be
instrumental to the development of PSP. This product
will also feature three dimensional computer graphics,
three dimensional audio, codec and other sophisticated
technologies and w ill be compatible w ith the M emory
Stick and other Sony products. Data w ill be stored on a
Universal Media Disc (UMD), a new technology devel-
oped by Sony. Each 60mm-diameter disc has a capacity
of 1.8GB. Over the years, our development of optical
disc technology has played a major role in expanding
markets for discs such as the CD, MD and DVD. The
UMD is our latest disc media, and we fully intend to