Philips to Market Sony-Style Digital Recorder : Technology: The Dutch giant is developing a different digital audiotape recorder too but will apparently hedge its bets.

The Dutch consumer electronics company Philips NV, in a move that appears to undercut its digital compact cassette invention and lend support to a rival product developed by Sony Corp., will introduce a digital audiotape recorder in Europe next year.

Philips, which just last week set the stage for a new format war in consumer electronics by confirming that it is developing a new digital cassette that is incompatible with Sony’s digital audiotape format, said it will market a consumer DAT machine that will retail for about 2,500 guilders, or about $1,450 at current exchange rates. Philips’ DAT machine will not be sold in the United States.

“We think that (our) digital compact cassette is better suited for consumers,” said Philips spokesman Jan Geel. But he said DAT sales could be “significant,” and Philips, which plans to introduce its competing digital compact cassette in 1992, did not want to be left out.

By hedging its bets on DAT, analysts say Philips may be concerned about the future of its beleaguered audiotape cassette, developed in 1963.

Although cassettes are still widely used and make up more than half of all prerecorded music sales, sales of prerecorded tapes fell in 1989 for the first time in the wake of competition from compact discs. Meanwhile, Sony--under pressure to establish the market for DAT recorders in the United States after a lawsuit challenging their importation--has been aggressively pushing its machines.

“My question is which (format) is going to be chosen by the high-end consumer,” said Mark Finer, a former Sony official who is now director of Communications Research, a consulting firm in Pittsburgh. “DAT has a very good track record” overseas and sales have grown steadily, he noted.

The battle between DAT and Philips’ digital compact cassette system recalls an earlier war that pitted Sony’s Beta videocassette format against VHS cassettes in the mid-1970s. Though the Beta format was first on the market and was considered to have better picture quality, VHS ultimately emerged as the dominant videotape format.

Many analysts say the digital compact cassette could likewise triumph because it will be able to play conventional audiocassettes as well as Philips’ digital tapes. Little technical information has been made available about Philips’ DCC machine, which is being developed by its Knoxville, Tenn.-based unit, Philips Consumer Electronics. However, experts who have heard DCC demonstrations say it sounds nearly as good as a standard compact disc.

The Philips machine will be able to record and play back a standard cassette tape in two ways: the conventional analog way, allowing consumers to play their existing prerecorded cassette tapes, or the new digital way, which--like DAT--records sound as a string of numbers. These numbers form a digital snapshot of the music.

Philips has enlisted Tandy Corp., the Ft. Worth owner of Radio Shack stores, to make and distribute the DCC tape players.

Although four of the six major record companies have tentatively agreed to release music in Philips’ DCC format, Paul Gluckman, editor of Audio Week, a New York-based trade publication, said the firm will eventually need the Japanese to market DCC machines to make the format a long-term success.