The move on Thursday, which was largely unexpected at this time, gives Sony a potent weapon by combining one of today's hottest digital technologies with a consumer device that has changed the way people listen to music since its introduction in 1979.
The electronics giant introduced the new Walkman on Wednesday in Japan, with much larger fanfare planned for Thursday in New York, when Sony celebrates the 20th anniversary of the Walkman. No information on pricing was immediately available.
The new Walkman, which features Sony's "Memory Stick" technology, will be introduced alongside other new portable music models. Smaller than a piece of chewing gum, the Memory Stick is a storage medium competing with memory flash cards for dominance in electronic devices, such as PCs and digital cameras.
Most consumer electronics makers will, at least in the short term, focus on portability, "because the small player-size and ruggedness that is enabled by solid-state media lends itself well to portable players," said IDC analyst Kevin Hause.
The light-weight, portable design also makes sense because most players must be hooked up to PCs for downloading and storing digital music, Hause said.
The next-generation Walkman furthers its strategy of melding all its properties, from content to hardware. That philosophy has its roots in the company's purchase of Hollywood studios and record labels dating back to the mid-1980s.
For the budding digital music scene, the new Walkman marks an important endorsement coming from one of the best-known brands in the consumer electronics industry. At the same time, however, it could pose a major threat to rival products such as Diamond Multimedia's popular Rio player.
Although analysts expect the digital music player market to explode, it is still relatively small. PC Data reports only about 125,000 units sold this year, mostly by Diamond.
"It's hard to create a market all by yourself," said PC Data analyst Stephen Baker. "I'm sure, in one sense, Diamond doesn't want competition. But right now it's hard for consumers to find MP3 players, because there has been only one."
The portable digital music player market is expected to grow to 6.67 million units in 2003, up from 62,000 last year, according to International Data Corporation.
IDC's estimates, however, do not reflect the possible impact of Sony entering the digital music market.
Creative Labs recently introduced its first portable digital music player and other consumer electronics companies, such as Philips and RCA, plan similar devices.
"Certainly Sony coming in helps legitimatize the market," Baker said. "Sony is also an electronic company and recognizes a good opportunity to get its name out there."
Also, the well-known Walkman brand could be a big boost for the players, which until now has confused some consumers with technical terms like MP3, said analysts.
As a music producer, Sony has been part of the copyright debate surrounding digital music, which typically is available for free and often in the MP3 format.
Owners of Sony Vaio computers will be able to download digital music to their PCs and transfer it to the Memory Stick, which is loaded into the MP3 Walkman. Memory Stick is available with up 32MB storage capacity. Sony plans to introduce the storage medium to more than 30 consumer electronic devices during the coming months.
The new Walkman is expected to go on sale during the holiday season. But a sales representative for a national electronics chain said on Thursday he doubted that Sony could get the Walkman to retailers that soon.
Sony delayed moving into the digital music market because of the copyright debate surrounding MP3-encoded music.
IBM and Sony had been developing a pirate-proof means of distributing music over the Internet.
Sony would not comment on speculation it would introduce the pirate-free format with the new Walkman.
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