Sony also adds that they believe AI technology is a future pillar of growth and they hope to catch up with major technology companies like Facebook, Apple, and Google to develop AI technology.
Aibo can show its love through "lifelike" eye, ear, and tail movements and a variety of sounds, Sony said.
The new version of Aibo will go on sale in Japan from January 2018.
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Sony has brought back its Aibo robot dog with a mechanical canine that's been stuffed with smart capabilities.
As it's 2017, the Aibo will come with a dedicated smartphone app, which will allow owners to adjust the settings of their robot dog and get additional tricks for it to perform from the "Aibo Store", as well as view any photos the dog's cameras may have taken. The new model will cost around $1,700.
The announcement comes a day after Sony confirmed its renaissance by forecasting its highest-ever profit this financial year, sending its shares surging to a nine-year high, and is part of the company's attempts to rekindle its pioneering prowess after years of restructuring. Users will also need to subscribe to a cloud service exclusively for the aibo.
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Sony pioneered entertainment robots with Aibo in June 1999, selling out its initial 3,000 batch in just 20 minutes and shipping around 150,000 dogs in Japan before ceasing production seven years later, when its core consumer electronics business struggled in price wars with emerging Asian rivals.
"It was a hard decision to stop the project in 2006, but we continued development in AI and robotics", Chief Executive Officer Kazuo Hirai said at a news briefing.
The technology is based on work done by Cogitai, a California-based startup developing AI software that learns continually from real-world interactions.
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The bionic pet follows on from Sony's previous Aibo model, which became defunct in 2005. Over the next few years, Sony launched two more Aibo generations, but interest waned as more affordable robots entered the market. "What's more, Aibo can detect words of praise, smiles, head and back scratches, petting, and more, allowing it to learn and remember what actions make its owners happy", said Sony.