Sony sees sunny outlook

Sony's electronics division has had a tough year

Last year's record performance is set to be repeated, electronics giant Sony has told investors.

The year to March 2002 produced record sales, partly thanks to the weakness of the yen, although profits dipped because of restructuring, falling share prices and thinning margins.

The company's upbeat predictions rest on hopes for the continued success of its PlayStation 2 games console, despite competition from old rival Nintendo's GameCube and the Xbox from Microsoft.

But the increasing popularity of broadband connections to the internet will also boost profits in the years to come, the company said.

"Sony as a group must work together as a single entity to create an appealing broadband environment," chief executive and chairman Nobuyuki Idei told analysts at a corporate strategy meeting.

"I am confident Sony can become a leading global technology company in the broadband age."

Slowly getting faster

The confidence expressed by Sony about broadband repeats an aspiration long shared by content companies but yet to come to fruition.

The take-up by consumers of broadband services - in essence, internet connections at speeds anywhere from four to 40 times faster than a standard dial-up phone connection - has proved much slower than hoped.

Except for South Korea and some parts of the US, high prices and slow rollout by incumbent telecoms companies means broadband take-up is languishing at no more than a couple of percent of internet users.

And hopes in the late 1990s that fast wireless services would allow broadband connections to mobile phones have been frustrated, thanks to the massive overspend on licence fees and the collapse in telecoms stocks.

Chicken and egg

Sony - which creates both entertainment and the electronic tools to receive it - is desperate for it to spread quicker.

But the company faces a problem - without the connection the content is worthless, but only the content can persuade people to sign up.

But Mr Idei told analysts he was confident that broadband would hit worldwide "critical mass" by 2005.

Singapore, Korea and Japan would reach that point even quicker, he said.

To aid take-up, Sony plans to launch an adapter that allows users to download movies from the Internet and play them back on their TVs.