hussien-11
Senior Content Specialist
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Sony's woes stem largely from its loss-making electronics division. The unit, which includes semiconductors, accounts for nearly 70% of revenues but hasn't been profitable for the past two years. By making its own specialty chips, Sony hopes to give its TVs, cameras, and cell phones technologies that rivals can't match. Putting the Cell in a gaming console gives the chip a high-profile start. Sony's gaming machine, PlayStation2, has been the hottest console in history, topping 100 million units in November after five years on the market. Analysts predict the next-generation machine will do even better. Sony is expected to sell more than 12 million PS3s in the first year and reach the 200 million mark within five years, estimates researcher Envisioneering Group.
Those numbers would give Sony the crucial economies of scale needed to ratchet down the cost of each chip -- estimated in the hundreds of dollars today. But matching Intel's reach won't be easy. The No. 1 chipmaker has sold hundreds of millions of Pentium microprocessors in PCs over the years. "The Pentium chip is unique in its stature, and I don't ever expect its success to be repeated," says Tom Starnes, an analyst at market-watcher Gartner.
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