This story is making TV headlines around the world, when someone as big as Sony announces they'll be selling consumer products direct online it's defintely going to cause a big shake-up in the high street (although they have been selling Vaio PC's online in the US for a few months).

Reuters:

Sony to Sell Consumer Electronics Online

By Yuko Inoue

TOKYO (Reuters) - Japanese electronics giant Sony Corp said on Tuesday it will start selling its consumer electronics products online, sending shock waves through the country's closely-knit dealer networks.

Sony said it had formed a new company, Sony Style.com, jointly with its domestic sales unit to sell customized electronics appliances through its Web site, beginning on Tuesday with its VAIO personal computers.

It aims for annual sales of 10 billion yen ($93.25 million) in the initial year, a Sony spokesman said.

The move will make Sony the country's first manufacturer to sell a range of consumer electronics products directly online.

``The point is that customers can buy tailor-made products,'' the spokesman said.

``They can buy VAIO computers with memory chips smaller or larger than the existing line-up. They may prefer certain software contents or net services pre-installed and vice-versa.''

The site will expand beyond VAIO computers and its peripheral products to include digital cameras, portable music players and other types of audio-visual equipment later this year.

Frequent customers will receive free Internet access through Sony's Internet provider So-net, based on a point system derived from the amount of goods purchased from the site at http:/www.jp.sonystyle.com.

The goods, paid by credit card, will be delivered directly to a customer's home.

Sony will also consider eventual sales of music content to be downloaded from the new Web site, the spokesman added.

Family-Like Ties With Dealers

While electronics and auto industries are seeking ways to sell products online as a way to cut distribution and inventory costs, they have been treading carefully for fear of upsetting dealer networks.

Companies that boast strong retail networks like Matsushita Electric Industrial Co and Toyota Motor Corp, are particularly cautious to protect their family-like ties with dealers, a reason often cited as a slow start for Japan's e-commerce.

Sony currently owns some 2,000 ``Sony Shops'' throughout Japan that sell mainly Sony products.

According to the Nihon Keizai Shimbun newspaper, Sony's products to be sold on the Web will have the same price tags as those sold at retailers to avoid possible friction with dealers.

But the move has already threatened mass merchandisers. A big retail chain official, who asked not to be identified, said that his company would consider not stocking Sony products if Sony does not listen to the concerns of the retailers.

U.S. Cd Retailers Sue Sony Music

Sony's announcement comes only a day after a group of thousands of record stores in the United States said they would sue Sony Music Entertainment for allegedly forcing retailers to sell CDs that drive consumers to Sony's online stores.

The group said the suit charges that Sony is illegally forcing retailers to carry compact discs with software and promotional inserts directing consumers to competing retail locations owned or operated by Sony.

Earlier, Sony president Nobuyuki Ideo, who aims to transform Sony into a vast ``e-empire'' selling everything from consumer electronics to music, said that he expects 30 to 40 percent of all Sony products to be sold online in the future.

($1-107.23 Yen)