Sony scores smash hit with new form factor Vaio

If Sony's recently launched Vaio W computer was a song, it would have debuted at number one on the Billboard chart with a bullet.

As it is, the new computer, a desktop machine that tries to compete with the laptops for size, has been sitting pretty at the top of Japan's PC sales chart for a month now and such is the demand that getting one is proving to be a major headache for consumers. The success of the product proved a surprise for Sony, which sold in a single day what it had expected to sell during the first month.

Behind the machine's success are its form factor, functions and surprising price.

The company began work on the machine after market research showed that, while more than half of Japanese consumers were buying laptop computers, they were not buying them for mobility but because they took up a small amount of space -- an important consideration in the type of one-room or two-room apartment in which young Japanese typically live. Figures from IDC Japan Ltd. for the fourth quarter of 2001 estimate 58 percent of all consumer PC sales in Japan during the period were laptops -- around double that of most other countries.

When not in use, the Vaio W takes up less space on a desk than a notebook computer. This is thanks to a keyboard that folds up to cover the lower half of the display when it is not needed. Sensing this action, the PC will automatically shut itself down and a software clock will appear in the half of the display that is not covered. The main body of the machine is also built into a case behind the monitor, and the screen can be pushed to a vertical position when not in use, further saving desktop real estate.

The machine is based on Intel Corp.'s 1.2GHz Celeron processor, a value chip that helps keep the price low, and has 256M bytes of main memory, a 40G-byte hard disk drive, CD-RW/DVD-ROM combo drive, TV tuner, Ethernet port and IEEE1394 i.Link port. It is also loaded with Sony's GigaPocket LE software, which emulates a VCR and allows users to record TV programs using the hard disk drive, and so can do duty as a PC, DVD player, TV and VCR all in one.

All of this has led to stellar sales. A closely followed local sales chart, which draws data from point-of-sales systems at 561 stores of 12 major retail chains, gave the Vaio W a 20 percent market share during the third week of February. That's one in five of all desktop machines sold, not just Sony machines. The top-ranking machine in the chart usually achieves somewhere around a 5 percent or 6 percent rating and PC manufacturers usually claim a hit product when they achieve a market share of around 8 percent.

"They are selling very well," said Kumi Shingyouchi, a senior PC market analyst at market research company IDC Japan Ltd. "I have to say, this is a very special case for one model. Even the iMac didn't sell this well."

Sony says the attractive design and features are pulling prospective customers into PC shops just to look at the machine and, when they see the price, turning them into actual customers. At ¥160,000 (US$1,200), the machine looks to many people like it should be more expensive. Its popularity has the company scrambling to keep up with demand.

"Retailers place their orders on Tuesday. We ship the PCs to them on Friday and by Saturday afternoon they are sold out," said Merran Wrigley, a spokeswoman for Tokyo-based Sony. "In the first month on sale, we have two to three times the amount we normally consider to be a hit product."

It would be easy to write off its success as a Japanese thing -- the small apartments common in Japan are not the norm elsewhere -- although Sony thinks it might be able to duplicate the success overseas. The company has been getting enquiries from outside of Japan and finds the most common question people have when they see the machine is, "When can I get one?"

Right now, there is no easy answer. The company is fully occupied keeping up with demand at home, although overseas launch plans are under consideration, said Wrigley.

IDC's Shingyouchi says the machine's cool factor alone won't cut it overseas.

"I think if they are going to sell the Vaio W overseas, it has to be priced cheaper. The U.S. market especially is more price sensitive so people will not pay more for a machine that takes up less space or has a good design."

The machine may be about to face an important test. On Tuesday Sony announced new versions of the machine, scheduled to begin shipping in April, that include a remote control but are otherwise unchanged. The new models are expected to sell for around ¥180,000, a price tag that would amount to a considerable premium for a remote control, but Sony says other factors, including the recent rise in computer memory and LCD (liquid crystal display) panel prices, are behind the majority of the increase.

Despite the more expensive price tag, Shingyouchi thinks the machine will continue to sell well but she doesn't see its competitors following with similar machines.

"I think Sony is going to be a special case because they have brand loyalty. NEC (Corp.) and Fujitsu (Ltd.) are going towards more commoditized systems. They have announced specially designed PCs but they didn't succeed like the Vaio W."

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