Sony Corp. (SNE) said on Tuesday it will launch its Blu-ray high-definition optical disc recorders in Japan in December, in time for the peak of the year-end shopping season but about a month behind rival Matsushita Electric Industrial Co. Ltd. (MC)

Sony's stock fell 2.75 percent to a 9-month low, hurt by investment bank Goldman Sachs (GS) cutting its earnings estimates and downgrading its rating to "neutral" from "buy."

At stake is not just dominance in the next-generation DVD hardware and software markets, but Sony's reputation as a top-class manufacturer with the ability to deliver quality products to the market on time.

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Sony, whose strong brand image once allowed it to charge a hefty premium for its products, has been hit hard by a series of setbacks in recent months such as recalls of more than seven million Sony-made batteries by PC makers and a delay in the highly anticipated launch of its PlayStation 3 in Europe.

The Tokyo-based company, whose epoch-making Walkman music players have long lost their leading position to Apple Computer Inc's (AAPL) iPod, needs to ensure a smooth launch of the advanced recorders to help regain consumer confidence in its technological prowess.

"We consider the Blu-ray recorder a core product for people in the living room to enjoy high-definition broadcasting, high-definition photos and high-definition movies," Sony Senior Vice President Kiyoshi Nishitani told reporters.

Electronics companies such as Sony and Matsushita, the maker of Panasonic brand products, are promoting the Blu-ray format as the next-generation optical disc standard, while Toshiba Corp. is a leading proponent of the rival HD DVD technology.

At the core of both formats are blue lasers, which have a shorter wavelength than the red lasers used in current DVD equipment, allowing discs to store data at the higher densities needed for high-definition movies and television.

Sony expects a model with a 500-gigabyte (GB) hard disk drive, which will hit store shelves on December 8, to sell for 300,000 yen ($2,550), and a version with a 250-GB hard drive to come with a price tag of 250,000 yen.

The latter will go on sale on December 16.

Sony plans to manufacture a total of 10,000 units of the cutting-edge recorders per month in the initial stage.

In comparison, Matsushita will start selling two Blu-ray DVD recorders in Japan on November 15.

Osaka-based Matsushita has said a recorder able to store 200 gigabytes of data on its hard disk drive would sell for about 240,000 yen and a 500-gigabyte model which can store about 63 hours of terrestrial digital broadcasting for 300,000 yen.

In the United States and Europe, Sony intends to focus on Blu-ray players for the time being, and has no concrete plans to launch Blu-ray recorders, Nishitani said.

It plans to offer its Blu-ray player in the United States this autumn.


Nishitani expects 500 or more Blu-ray disc software titles to become available in a year, boosting the appeal of Blu-ray recorders and players to movie watchers.

Movie and music providers in the Blu-ray group said in August they would offer an initial batch of 75 software titles in Japan, including "Pirates of the Caribbean: The Curse of the Black Pearl" from Walt Disney (DIS) and Sony's "The Da Vinci Code."

They said many of the 75 titles will hit stores by the year-end.

In the competing HD DVD camp, Toshiba started rolling out its HD DVD players in Japan in March, becoming the first company to offer next-generation optical disc players.

The new Blu-ray and HD DVD machines are expected to breathe new life into the slowing home video market, but the failure of the competing Toshiba- and Sony-led groups to agree on a unified format has paved the way for a costly battle reminiscent of the VHS-Betamax war that caused widespread customer confusion.

While Blu-ray has drawn more support among Hollywood and electronics firms, HD DVD has garnered allies among U.S. computer industry titans Microsoft Corp. (MSFT) and Intel Corp. (INTC)

Sony plans to launch PlayStation 3, which is equipped with a Blu-ray player, in November in Japan and North America, holding high hopes that potentially explosive demand for PS3 will give the Blu-ray camp a leg up over the competing format.

Sony sold almost a million units of PlayStation 2 in the first three days of its launch in Japan in 2000.

Microsoft, on the other hand, will launch an HD DVD player for its Xbox 360 game console on November 22 in Japan, stoking a format battle for next-generation optical disc technology in the video game industry.

The benchmark Nikkei average edged down 0.08 percent.