Sony's Aiwa challenges iPod

TOKYO: Electronics giant Sony Corp said its Aiwa brand would launch a line-up of compact digital music players, in a bid to challenge the dominance of Apple Computer Inc's popular iPod player.

Aiwa introduced eight MP3 music players -- six flash memory and two hard disk models -- to go on sale next month as the subsidiary completely absorbed by Sony in December 2002 strives to return to profit after almost four years in the red.

"We want to strive to become profitable in 2004/05 and these new products are a first step towards achieving that goal," Sony vice-president Shizuo Takashino told a news conference.

Last January, Sony said it targeted the current business year to March 31 as Aiwa's year to return to profit, but Takashino said development costs for its new digital music players derailed those plans.

Revenues dwindled steadily at Aiwa -- known for its low-end stereo systems -- in recent years, as low-cost Asian manufacturers caught up with it on quality and it fell behind on product innovation.

Sony Chairman,Nobuyuki Idei has said he saw an opportunity to use Aiwa for a multiple brand strategy, similar to auto giant Toyota Motor Corp's efforts to create a premium "Lexus" brand and a less expensive "Scion" brand.

"We still hold a strong position in the stereo sets market, but we hope these new MP3 players will be our future growth engine," said Masaru Hirauchi, head of Aiwa's business for Sony.

In order to be successful, Aiwa must eat into Apple's leading share in the digital music player market. Apple has sold over two million iPod units since its launch two years ago, winning over consumers with its sleek design and huge storage capacity.

Aiwa has a digital music player about the size of a business card with the capability to hold 500 songs, to be sold for around 35,000 yen ($330).

That is compares with the $249 price tag for the similar sized iPod mini that Apple plans to introduce next month.

Aiwa's pocket music player is thinner and lighter, 0.42 inches and 2.4 ounces, than Apple's iPod mini, 0.5 inches and 3.6 ounces, but it holds only half as many songs.

It will also launch a series of "USB Audio" products, which are MP3 players that connect to the personal computer through the Universal Serial Bus (USB) port found on most PCs.

Aiwa's Hirauchi said he targets sales of one million units for the entire line-up of digital music players during the first year of sales.

© Reuters