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Tracing Sony’s Return to Its Aibo Robot Dog Business

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150,000 Aibo sold before product killed off

Sony’s (SNE) Aibo robot dog brand has a long history. The original Aibo, the dog-shaped pet robot, was sold by Sony between 1999 and 2006, before the product was halted to apparently allow room for cost-cutting to stem the losses in its electronics businesses. Sony had sold roughly 150,000 units of Aibo before it discontinued the product.

The original Aibo sold for between $600 and over $2,000. The new Aibo, launched last month, starts at $1,700, a price that puts the product in the range of several of its potential Japanese (EWJ) competitors. Sprint (S) parent SoftBank’s Pepper robot costs roughly $1,600, while Sharp’s Robohon smartphone-robot costs ~$1,750, and Toyota Motor’s (TM) Kirobo Mini robot costs $360.

Recurring revenue model

In addition to charging $1,700 for the new Aibo, Sony will also charge owners of the robot dog $25 per month to cover ongoing technology (QQQ) updates that would enable the robot to learn new tricks and develop unique behavior patterns.

The monthly fee for Aibo owners seems to underscore Sony’s emphasis on building a recurring revenue model. If the new Aibo succeeds, its higher starting price and the monthly subscription fee tied to the product could give a strong boost to Sony’s top line.

In fiscal 2Q17 (ended September 30), Sony reported revenues of 2.1 trillion yen (about $18.3 billion), indicating a 22.1% YoY (year-over-year) rise. The company posted an operating profit of 204.2 billion yen (about $1.8 billion) for the quarter, implying a ~346% YoY rise.

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