They're not laughing at Sony PCs now

TOKYO -- Computer-industry veterans chuckled when Sony Corp. unveiled the Vaio, its purple personal computer, in 1996.
Written by ZDNet Staff, Contributor

TOKYO -- Computer-industry veterans chuckled when Sony Corp. unveiled the Vaio, its purple personal computer, in 1996. But with PC Sony is one of just four big PC brands left standing on U.S. retailers' shelves.

The improbable survival of the Vaio is a sweet vindication for Sony Chief Executive Nobuyuki Idei, who had previously led several short-lived efforts to establish Sony in branded computers. Next week, in a keynote address at the Comdex computer-industry convention, Idei will describe his view of a future in which homes are wired with networks of digital gadgets built around one of three devices -- the PC, the TV or the video-game machine. So far, Sony is the only company that sells all three and the accessories that connect them.

Sony's computer ambitions warrant watching, given how much influence the company has had in consumer products. Long before most rivals, Sony recognized that consumers want something more from a computer than megabytes and gigabytes. It kept that thought in mind when creating the petite Vaio 505 notebook series, whose sleek looks have made up for what it lacked in cutting-edge performance.

Sony's Vaio 505 series laptop
"They perceived ahead of everybody else a change in consumer buying trends," says Derek Schneideman, president of the Japan office of Gateway Inc., the San Diego PC maker and Sony rival. "A lot of other companies saw the 505 and it was an epiphany: 'Yes, these guys have it right.' "

The 505 series -- slim, silvery with grape-toned accents -- was the technological offspring of an iron-willed designer and a plain-vanilla engineer driven to redeem a personal track record of failed products. It quickly developed its own consumer cachet and strong sales after hitting the market in Japan in late 1997 and the U.S. in June 1998.

Sony continues to face major obstacles in PCs. For one thing, only a few of its products are profitable. And the Vaio series is much more popular in style-conscious Japan than in the bigger U.S. market, where price and performance count more. Sales of Sony PCs total less than a million units per year and are well below those of its single most profitable product, the PlayStation game machine, which has sold 65 million units since 1995.

In 1995, Andrew Grove, then Intel Corp.'s CEO and now its chairman, suggested to Idei over dinner that Sony try again to enter the PC business with a branded machine. After earlier failed efforts at branding, Sony for a time had manufactured computers for Apple Computer Inc. and was still producing them for Dell Computer Corp.


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In the summer of 1996, Sony stepped back into the business with three desktop models that stood out mainly because they were purple and pricey and had the rather obscure name Vaio. (It stands for "Video Audio Integrated Operation," a kind of shorthand for the technology convergence Sony sees coming.)

The next year, 1997, was the year desktop PCs broke through the $1,000 price floor. Sony determined the desktop Vaio's costs were too high and sales volume too low to compete on price. So Sony held its computer steady at the high end; only in the last year or so has it introduced a sub-$1,000 model.

Around this time, Idei summoned his top computer managers and issued a simple directive: "Build a Sony-style personal computer." The managers heard the order to come up with a PC whose design would be as distinctive as Sony's televisions, Walkman and digital cameras.

Taking up the challenge
At the main Sony research facility in Japan, an engineer named Susumu Ito took up the challenge. Until that point, Ito says, his career had been marked by canceled products and flops. He had toiled for years on the ill-fated Magic Link, a $1,000 hand-held computer designed a few years before such devices became popular. His track record weighed heavily on him and he felt driven to deliver a hit.

Dressed in a pocketed vest and known for shuffling around the office in slippers, Ito seized his opportunity. The first computer he and his small team developed was a notebook that lacked the "Sony-style" the CEO had ordered up. It was axed. Ito made a crude paper model of a second notebook. "This product will not be dropped," he vowed.

Then, in late 1996, a designer named Teiyu Goto, a fan of Italian suits and German cars, joined Ito. Goto exudes confidence. He made his name at Sony styling TVs and the first PlayStation. He thought a "Sony-style" device should be a stylish personal accessory first and a computer second.

Goto sketched out a model that was a mere 22 millimeters thick, or just less than nine-tenths of an inch. Instead of standard plastic, the body would be sheathed in machine-chic magnesium alloy. Ito and his crew liked the look but worried it would be impossible to cram the hard drive, battery, processor and phone jack into the dimensions Goto demanded.

The engineers also weren't sure how to cool the machine, or if the magnesium alloy plates could be mass-produced in the quantity Goto needed. Over time, the designer gave back a couple millimeters to the engineers but refused to budge more. "Among Sony engineers, I have a sharp tongue," Goto says. "I guess I can make engineers cry."

The technical standoff might have killed the project if it hadn't been for Keiichiro Shimada, one of Sony's top engineers who had helped create the camcorder. Shimada weighed in and proclaimed that Goto's unorthodox design "should be our secret weapon" in the PC market. Sony would sell it in Japan first.

Expressing doubts
Ito expressed doubts that cost-conscious PC buyers would want an expensive magnesium machine. But he was overruled, and so he plunged ahead. For more than a year, he would work until 11:00 every night, ride the train home and then quaff Kirin Lager beer until he fell asleep, he recalls. On weekends, he tended his vegetable garden. He dispatched engineers to coax better yields out of suppliers' magnesium production lines. And, after building several prototypes, he figured out how to dissipate heat from the computer's processor through intricate ducts, doing away with the need for a fan that drains power.

But fashion and function were destined to collide, and it happened over the issue of one millimeter. Ito discovered that by adding just that much thickness to the notebook's shell, he could double the size of the hard drive possible under Goto's design. But Shimada supported Goto, declaring that keeping the notebook thin was paramount, even if the hard drive would be subpar. Ito relented. "Goto-san is very stubborn, but ultimately his ideas are good for the customer," he says.

Once establishing itself in the market, the Vaio 505 became more powerful as components improved. Today's most advanced version carries an eight-gigabyte hard drive but is no thicker than the first version.

Two months after Vaio's U.S. introduction, Apple Computer would revive itself with the curvy iMac, which also emphasizes looks over function. And while beige boxes still rule in the corporate PC market, many companies' consumer models come in a variety of colors and shapes. "The computer business is now about form," says Larry Mondry, top merchandiser for CompUSA Inc., the nation's biggest computer-store chain.

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