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Sony Hands PDA Market a Defeat
washingtonpost.com Staff Writer Wednesday, June 2, 2004; 9:46 AM
The Financial Times said Sony's decision to stop selling the Clie in U.S. and European markets is "the latest indication of the growing challenge from 'smartphones' and ultra-light portable PCs equipped for wireless networking. The Japanese consumer electronics group plans to focus instead on wireless devices that can play films, games and music." USA Today said "Sony's withdrawal from the once-booming market -- which it entered with great fanfare in 2000 -- shows how quickly PDAs are flaming out, technology analysts say. 'It's not really the space that it once was,' says analyst Cindy McCurley with In-Stat/MDR."
The company's "pullout underlines the overall decline of conventional hand-held devices, which typically are used to keep track of contact information and appointments. That market was hit hard by the tech downturn several years ago. Since then, the industry has been battered by the rise of competing devices, including high-end cellphones," The Wall Street Journal reported. "Analysts said the move is a blow for PalmSource Inc., which makes operating systems for hand-held computers and counted Sony as one of its biggest licensees. PalmSource shares declined 12% on the news, trading at $17.84 at 4 p.m. on the Nasdaq Stock Market. Sony's decision was better news for palmOne Inc., which sells competing devices based on PalmSource operating systems. PalmOne's shares traded at $21.45, up 1%, in 4 p.m. Nasdaq trading."
Sony, of course, is spinning the news differently. "The electronics and entertainment giant denied it was abandoning the Clie -- or the 3.5 million customers who bought one -- but Todd Kort, analyst at technology research firm Gartner Inc., said Sony would probably let the device die quietly," The Los Angeles Times reported. "'They wanted to do it gently,' Kort said, noting that the Clie is powered by the Palm operating system licensed by Sunnyvale, Calif.-based PalmSource Inc. 'They have an equity stake in PalmSource and they didn't want to yank the rug from under them all at once.'"
Sony's Clie PDA line won't be on shelves here "this holiday season, as handheld sales continue to decline and cell phones equipped with cameras and other features catch on with consumers," The Washington Post reported. The article detailed how the handheld market continues to wither. "Sales in the handheld industry have slipped in recent years. At the market's peak in 2001, 6.4 million units were shipped in the United States, according to research firm IDC. In 2003, that number was down to about 5 million. David Linsalata, an analyst with IDC, said that the declining sales are a result of a handheld industry that hasn't figured out how to make products that are indispensable to consumers. ... Instead, cell phone makers have been gaining ground by adding photo, e-mail, calendar and other software to their products. As a result, sales of 'smartphones' edged past handheld sales worldwide for the first time last year, for a total of about 13 million phones last year compared with about 11 million handhelds worldwide."
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