Matsushita Joins Philips to Create a Digital Cassette

Philips of Holland, Europe’s biggest consumer electronics conglomerate, said Friday that it will join forces with Matsushita of Japan to launch an audiocassette with the sound quality of a compact disc.

In a widely expected move, Philips Electronics NV said it will jointly license the technology for its Digital Compact Cassette to record companies, blank-tape makers and hardware manufacturers with Matsushita Electric Industrial Co., the world’s biggest consumer electronics company.

The marketing agreement is a direct challenge to Japan’s Sony Corp., which plans to introduce competing technology early in 1992.

In the battle to get record companies to use the new cassette system, Philips can now also add Matsushita’s MCA to its own record company, Polygram NV.

Licensing of DCC will start this year, and the first cassettes and cassette players are expected to reach the stores in the first half of 1992, Philips said.

DCC will allow music lovers to enjoy CD sound on systems that can record and erase. It is also designed to not to “jump” when jogged, a problem for portable or car-based CD players.

Sony’s Mini Disc, a miniature compact disc, has the same attributes but is a completely different system.

The new agreement, therefore, throws the two Japanese companies into the same kind of competition for market dominance that they experienced when Sony introduced its Beta videocassette format and Matsushita offered its ultimately successful VHS version.