Sony Aims to Amaze With Its Wireless TV

Twenty-five years ago, Sony Corp. invented a device that allowed people to take high-quality audio with them anywhere they went. It was the Walkman, and it changed consumer electronics forever.

This year, Sony will bring to the U.S. a device that allows people to take high-quality video with them just about anywhere. It’s called Location Free, and its saga illustrates how incredibly difficult it has become to invent, sell and sustain a new concept in personal electronics.

It could also capture the public’s imagination like no Sony product has in a quarter-century.

“This product is not the next Walkman,” said Peter King, a London-based analyst specializing in home electronics for Strategy Analytics. But “it does represent a stake in the ground. It is Sony saying, ‘This is where we are going.’ ”

Sony needs a hit -- badly. In its fiscal 2003 ended in March, the company’s net income was $963 million, far short of its prediction of $1.5 billion. Sony executives placed much of the blame on sagging sales of some of its historically strong consumer products, including Vaio computers and Handycam camcorders. This year, the company has been going through a painful restructuring that includes the elimination of 20,000 jobs.

With Location Free, Sony is aiming to change the way people watch television.

Taking advantage of the same wireless technology that allows laptop computer users to log on to the Internet over the air, Location Free is designed to make couch potatoes more mobile. After connecting a base station to a dedicated cable or satellite TV feed, you can carry the 5-pound, flat-panel liquid crystal display around the house or into the yard without losing the signal.

If the base station is connected to a DVD player, you can touch the screen to start, stop, rewind or fast-forward a movie. If it is connected to a broadband Internet feed, Location Free becomes a Web-surfing and e-mail machine.

And if you pack Location Free when you go overseas, you can hook up with a hotel broadband connection and watch your favorite shows from back home.

“It definitely has the cool factor going for it,” said Tim Bajarin, president of consulting group Creative Strategies in Campbell, Calif.

Just ask Apple Computer Inc. co-founder Steve Wozniak. He bought an early version of Location Free during a visit to Japan.

“I loved my early Airboard,” Wozniak said, calling the device by its Japanese brand name. “It was certainly impressive to ... walk around watching TV. I would never have thought of that.”

For the American masses, however, Sony executives are clearly struggling to figure out how to market their mobile TV. Sony President Kunitake Ando has complained that the company has been unable to convince consumers in Japan, for example, that Location Free isn’t just another LCD television.

And fitting all of its features into a memorable phrase presents a challenge: one company news release described it as a “portable personal broadband LCD television system.”

Even the name needs help. Although the official Sony stance is that it will be called Location Free, some executives said privately that it was still up for discussion.

Sony isn’t saying how many of the $1,500 devices it plans to ship to U.S. stores in October or how many it hopes to sell this year.

The track record of Airboards in Japan isn’t all that encouraging. Sony won’t release sales figures, but Ando acknowledged in a 2002 Fortune magazine interview that the product had difficulty finding its way into the marketplace after its introduction in late 2000.

The first Airboards used a wireless technology that wasn’t powerful enough to handle the amount of data needed to put a high-quality video image on a 12-inch screen. The devices displayed fuzzy pictures and were susceptible to interference if they crossed signals with cordless phones, microwaves or other devices in a crowded area such as a dormitory or apartment building.

“If you were out in the country you might be OK,” said Richard Doherty, technology analyst at Envisioneering Group in Seaford, N.Y. “But in a dorm room or an apartment building, you run the risk that two devices would pick up signals from each other.”

Those problems delayed the U.S. rollout, originally scheduled for 2001.

As Sony labored on technological fixes, Americans became more accustomed to using wireless technology to log on to the Internet in homes, coffee shops and hotel rooms. In the interim, the company put the finishing touches on Net-AV, the technology that enables Location Free screens to be used on the road.

“This is very good timing for us,” said Kazuhiko Hirai, one of Sony’s marketing executives in charge of bringing Location Free to the U.S.

Sony made its name in consumer electronics by combining existing technologies to create new kinds of products, from the electric rice cooker to the Betamax videorecorder to the AIBO robotic dog. Likewise, the elements of Location Free -- flat screens and wireless adapters -- were well established before Sony engineer Satoru Maeda first put them together in 1998.

“I thought about how consumers watch television,” said Maeda, who had helped develop Sony’s cordless phones. “I thought that could be changed if I integrated some of the technologies from a digital wireless telephone.”

It was not an impersonal exercise. Maeda wanted to watch his favorite shows -- including the yearlong taiga dramas that are based on Japanese history -- wherever he was in his home or on the road.

“When I saw the video remotely controlled over the Internet, I got emotional,” he said.

Some analysts are optimistic about Location Free’s U.S. prospects. Although the price could turn off some people, Bajarin said it could catch on faster than TiVo, which bewildered consumers when it debuted in 1999.

“Unlike the TiVo, people will understand what this is and its value from the beginning,” he said.

Like TiVo, Location Free may become famous without becoming a financial success.

Sharp Corp. has already begun selling a wireless flat-panel TV in the U.S., although it uses the less-advanced wireless standard of the early Airboards and they can’t be controlled over the Internet.

If Sony does end up with a hit, knockoffs will be inevitable. Discount manufacturers in South Korea and China could simply put all the elements of Location Free together now that Sony has demonstrated the benefit of doing so.

Hirai said it would take at least three years for copycats to match Sony’s technology. “By then,” he said, “we will have a whole new version that is another three years ahead of everyone.”

Those concerns may be beside the point. Research analyst Yuki Sugi in the Tokyo office of Lehman Bros. called Location Free too esoteric to become a mass-market item. But as a symbol for Sony, she said, “this is the right step.”

“It shows ability and potential to be creative, to create a new world of digital products. It’s Sony’s DNA .”