(IDG) -- Sony this month will take the wraps off a small notebook computer with a built-in camera for capturing digital images or videos, a company spokesman said Friday.

The Vaio PCG-C1 houses a one-sixth-of-an-inch, 270,000-pixel video camera that can be used for taking digital still images and video clips with sound, the Sony spokesman said.

The unit, shipping only in Japan, comes with an application called PictureGear, Version 2.5 for organizing and browsing images. The Sony-developed software can be used to adjust images' brightness and contrast, and add simple animation to images, he said.

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The Windows-based Vaio notebook also allows users to integrate images and text into single documents or attach them to e-mail messages, the Sony spokesman added.

The unit is Sony's latest attempt to keep ahead of its competition as it tries to wedge a place for itself in the market for innovative portable PCs. The company earlier this year created a big splash in Japan with its first Vaio notebooks, which offered a sleek design and which were soon copied by rival PC vendors.

Sony presently stands at about seventh place in Japan's notebook PC market, ahead of Dell and Compaq, according to IDC Japan.

The company is still mulling the new Vaio's overseas launch. The head of the Sony's computer group said recently he expected to roll out the diminutive unit in the United States by year end. However, the spokesman said Friday that no plan has been decided yet. Still, another source familiar with the new unit said the machine would not likely be ready for a U.S. launch until next year.

Sony is keeping the Vaio PCG-C1 price open in Japan -- in other words, the company is not setting restrictions on the price, meaning dealers can set their own prices. However, the vendor expects the unit's street price to be about $1,850, the Sony spokesman said.

The PCG-C1 is powered by Intel's 233-MHz Pentium MMX, ships with a 3.2GB hard drive, and has 64MB of synchronous DRAM.

The 1.1-kilogram machine measures 240mm by 140mm by 37mm and has an 8.9-inch XGA (1,024 by 480 pixels) thin-film transistor LCD screen. Its keyboard has a 17mm pitch and a stroke of 2mm.

The machine supports the IEEE 1394 interface and includes a 56Kbps modem, the Sony spokesman said.

Rob Guth is a correspondent in the Tokyo bureau of the IDG News Service.