Sony pulling out of the handheld market - I don't quite get it

[Frog]

Hi,

OK, so Sony don't sell enough PDAs to make the market viable in the US / Europe. But if they're continuing to sell within Japan, and innovate new products, doesn't the R&D cost remain the same?

Also, porting a device to multiple languages must be fairly easy, so why don't Sony sell foreign language OS versions from Japan?

F.

[.PoNeH]

bump that..........

[Reggie]

I've posted my thoughts about this in a recent article in brighthand. I think it's the cost of customer support.

[ballistic]

I've posted my views on this subject over here, at Tapland, Brighthand and Mobileread. Please read this post and check out PaidContent.org's (http://www.paidcontent.org) dedicated Sony (http://www.paidcontent.org/pc/arch/cat_sony.shtml) page.

To me, it's fairly and painfully obvious. Its all about Content, Digital Rights Management and the Palm OS.

With the Palm OS, Sony couldn't control the way people use the Clies to play content (music, movies, etc). There are several programs on Palm OS (Kinoma, MMPlayer, Pocket Tunes, etc) that allow someone to play any content they choose (legally owned/"fair use" or illegally downloaded/pirated).

Sony, being a huge Consumer Electronics Company, as well as a Media Giant (movies, music, games) has always had internal conflict between those two divisions. Sony wants to control how you use your Sony hardware and what you can use it for. The Palm OS didn't offer them that total control, although Sony tried to control content on their Clies (ATRAC, Memory Stick with Magic Gate, crippling the CF slot so you couldn't use it to store movies and music files, etc).

IMO that's the real reason Sony killed the Clie line: content delivery and DRM. There are too many ways around it on Palm OS and Sony is looking at the PSP and other closed (proprietary) content delivery systems with very strict DRM.

Sony's VZ90 design and release only in Japan is another indication of this IMO. Sony also announced (coincidentally?) that they (along with some partners) will be acquiring MGM (http://quote.bloomberg.com/apps/news?pid=10000103&sid=aVBfQLRsszPQ&refer=us) for about $2.9 Billion US, thereby doubling Sony's movie library and furthering their plans for content delivery. Sony will leverage content to drive hardware sales and vice versa, as well as leverage their percentage of content marketshare, now 40-50% of movies and music coming out of Hollywood, to try to set industry formats and standards like the Memory Stick, UMD, ATRAC, Blu-Ray DVD, etc.


Idei's goal is to unite consumer-electronics and media businesses through products such as the PSP hand-held game machine and the Airboard portable television, which is designed for watching movies on the Internet.

IMO this is a main strategy Sony is banking on in their content delivery plans, leveraging their control of hardware and content to tie content and hardware to each other, driving sales of both, all using Sony's proprietary formats and DRM along the way in attempt to set industry standards and regain their dominance in Consumer Electronics. With their recent acquisition of MGM, Sony is now becoming not just a media and consumer electronics giant, they are becoming a media monopoly that could leverage their control of market share and stifle competition.

It's now perfectly clear why Sony killed the Clie in the US, why the VZ90 is designed the way it is, and what Sony has in store for the PSP besides games.

As Reggie states, customer support costs might play into it a bit, especially for other PDA manufacturers, but without being able to compare hard numbers of customer support costs in different regions, I'm not convinced. In Sony's case however, customer support costs, if truly higher in the US, as well as the flat PDA market only accelerated the inevitable.

Why only in the US? The Digital Millenium Copyright Protection Act. Section 1201, the so-called "anti-circumvention clause" has eroded fair use in the US and can be used by companies like Sony to go after producers of tools and software that can circumvent DRM.

The DMCA has made it easier for the recording industry and content providers to take away our fair use rights (in the US at least). Other countries are considering similar laws using the DMCA as a model, and incorporating it in
to international trade agreements and copyright laws.

It wasn't too long ago that when you bought a movie, book or album you owned it for life. You could even legitimately pass your purchased content on to friends or family members or even sell it or trade it in. This is unfortunately becoming more and more rare in this digital age.

Sony is banking on it. The Clie line will eventually whither on the vine and die, never to return as we know it. The word "Clie" is suspiciously absent the front of the VZ90. Coincidence?

[.PoNeH]

I just think it's all a conspiracy...you know those Japanese ppl enjoy being superior to us electronically. :(