Philips Will Share in Licensing of Sony’s Mini Disc System

Dutch electronics maker N. V. Philips and Japan’s Sony Corp. will jointly provide licenses for Sony’s Mini Disc recording system, even though Philips has developed a rival digital format, the companies announced Wednesday.

The companies plan to begin selling their incompatible digital audio recording systems next year, and analysts have been debating which format will dominate.

“This is a move toward coexistence,” a Sony official said. “It doesn’t mean that Philips is going to manufacture Mini Discs or that we are going to make (Philips’) digital cassettes.”

Philips’ Digital Compact Cassette system uses tapes that are nearly the same size as current analog cassettes, while Sony’s Mini Disc uses discs similar to miniature compact discs.

Both formats allow digital recording at a lower cost than digital audio tape recorders, which were introduced in 1987 but have failed to meet sales expectations because of high costs and copyright disputes.

The two consumer electronics giants co-developed CDs and share many of the patents for optical technologies that are used in both CDs and Mini Discs.

“Philips, in a spirit of cooperation, has agreed to be a joint licenser, which will make the license process much smoother,” said the Sony official, who spoke on condition of anonymity.

In a statement, Philips Chairman Jan Timmer said, “The success of the Philips-Sony relationship in the development of the CD has encouraged us to once again work together and pursue new technologies for the benefit of the consumer.”

The Sony official said both Sony and Philips will receive royalties from licenses needed by other companies to produce Mini Disc equipment and discs. The licensing will be handled by Sony.

The two companies said in a statement they “will work together to provide the DCC and MD (Mini Disc) technologies with a smooth market introduction.”