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Samsung, Sony deepen love-hate
relationship
SEOUL - An unusual
love-hate relationship between the South Korean and
Japanese electronics giants is attracting a lot of
attention from their global rivals.
According to
analysts on Tuesday, Samsung Electronics Co and Sony
Corp are intensifying competition in the digital
entertainment market worldwide while also joining forces
in the development of next-generation storage media and
flat-screen products.
In an attention-getting
move, Samsung of South Korea and Japanese giant Sony
announced in August the formation of a strategic
alliance to jointly promote the use of Memory Stick, a
next-generation IC recording medium. The two firms are
also close to closing a long-term deal where Samsung
will supply its liquid crystal display (LCD) televisions
to Sony.
Despite the deepening alliance,
however, Sony and Samsung are escalating confrontations
throughout the world's home-entertainment hardware and
contents market.
"A decade ago, Samsung could
hardly be seen as Sony's rival in the electronics
industry," said an industry watcher. "Thanks to the
advent of the digital era, however, Samsung has
noticeably narrowed its gaps with Sony in most
electronics fields. Today, the two giants are seeking to
take advantage of each other's strong points to maximize
synergies," he said.
In what appears a challenge
to Sony, Samsung has recently signed an exclusive deal
to supply US entertainment group Walt Disney with its
"MovieBeam" set-top box, which is capable of storing up
to 100 movies on a 160 gigabit hard disk drive and
allows free access to major movies via television
video-on-demand services.
On the basis of the
MovieBeam project, Samsung aims to further expand
business cooperation with Walt Disney and other global
leaders in the home entertainment hardware and contents
sectors, company officials said.
In a related
move, Samsung unveiled plans for a tie-up with Napster,
a US-based music file provider, during its investor road
show in New York last month. A Samsung-Napster alliance
may call for the South Korean company to provide MP3
devices capable of reproducing Napster-supplied musical
contents.
"Samsung, a global leader in digital
hardware, is rapidly branching out into the contents
sector in a bid to secure a global initiative in the
dawning home-network market," said the industry analyst.
"In other words, Samsung is clamoring for the
convergence of hardware and services."
Samsung's
growing ambition in the home entertainment market is
putting it on a path for direct competition with Sony,
which has declared digital contents one of its core
businesses.
Indeed, Sony showcased its vision
for the future of digital entertainment convergence
during an international marketing event in Paris last
month. At the event, jointly sponsored by Sony Music
Entertainment and Sony Picture Entertainment, Sony
Chairman Nobuyuki Idei declared Sony the sole global
enterprise seeking to combine electronics goods and
entertainment.
"Digital TVs, movies, music, game
and digital contents will be the core future businesses
for Sony," said the chairman, unveiling a number of
state-of-the-art audio/video appliances at the show.
Regardless of the fierce competition between
Sony and Samsung to seize the initiative in the digital
entertainment market, the two firms are getting
increasingly serious about bilateral strategic
alliances.
On August 2, Samsung and Sony
announced that their companies have signed a memorandum
of understanding to strengthen cooperative ties,
initially exploring the possibility of the adoption by
Samsung of the Memory Stick in digital audio products,
digital camcorders, DVDs, mobile phones, PCs, PDAs
(personal digital assistants), televisions and so on.
The pact called for the two companies to share
information related to the Memory Stick and jointly
develop new Memory Stick-applicable products. The two
companies will also engage in the joint promotion of
Memory Stick to invigorate the industry.
"Samsung believes that Sony's marketing
strengths accumulated over many years can be well
combined with Samsung's digital technologies to help
maintain the two companies' leading positions in the
market," said a Samsung spokesperson.
The two
electronics giants are also weighing a tie-up in the LCD
sector to jointly counter the growing market influence
of global LCD leader LGPhilips LCD Screen. Industry
sources said negotiations on the establishment of a
Samsung-Sony LCD joint venture are underway.
(Asia Pulse/Yonhap)
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