Companies that thrive do so by adapting to a changing market. Sony is revamping its manufacturing and marketing plans in an attempt to become both more efficient and more responsive to consumer needs.

Some ultra-high-end two-channel specialists may still be singing the blues, but others in the electronics retailing business are humming happier tunes.

Chip manufacturer <A HREF="http://www.esstech.com">ESS Technology</A> is no stranger to audiophiles interested in new formats. It was responsible for one of the first "universal" SACD/DVD-Audio <A HREF="http://www.stereophile.com/news/11059/">decoding chips</A> and more recently was the supplier of a <A HREF="http://www.stereophile.com/news/11296/">special-purpose chip</A> for Linn's SACD "Silver Disk Engine" designs.

Beginning next year, <A HREF="http://www.xmradio.com">XM Satellite Radio</A> won't merely offer 100 channels of news, sports, talk shows, and the entire spectrum of music nationwide. Thanks to a partnership announced May 30 with <A HREF="http://www.commandaudio.com">Command Audio Corporation</A>, XM will allow listeners to personalize their radio programming.

In his review of the <A HREF="http://www.stereophile.com//digitalsourcereviews/590/">Meridian 508.24 CD player</A>, Wes Phillips finds the machine "a beautiful design with impeccable technical credentials&mdash;a CD player that belongs, with only a few others, at the very sharpest portion of the leading edge, and that joins them in producing sound that is highly musical and hard to criticize."

<IMG SRC="/images/newsart/he2002.viola.jpg" WIDTH=100 HEIGHT=67 BORDER=0 ALIGN=LEFT>If you think the name Viola Audio Laboratories sounds familiar, wait 'til you hear the names behind it: Tom Colangelo, Paul Jayson, and Tony DiSalvo&mdash;all former officers at Cello. Viola, working out of Cello's former New Haven facilities, is now producing a complete line of electronics, from the $18,000 modular Spiritu preamp to the $12,000 Bravo Double Set monoblock amplifier. The company also manufactures audio cables and a modular loudspeaker, the $18,000/pair Allegro, as well as an $18,000 subwoofer, the Basso. The system certainly is elegant-looking, and it sounded impressively coherent in a small hotel room&mdash;and that was with both the Allegro's bass module and subwoofer disconnected!

Wandering around the show, we were struck by how good most of the speakers we were hearing were. Not just the cost-no-logic designs, but pretty much <I>all</I> of them. Are we audiophiles lucky or what?

HE 2002's first day was filled with press conferences, but none was more widely anticipated than Sony's. The pre-conference chatter was filled with insiders insisting they positively knew for a fact that Sony was confirming last week's rumor that Universal and Sony were discontinuing CD manufacture in favor of dual-layer SACDs&mdash;and also by insiders who insisted it was simply a rumor.