Sony to Challenge Apple with Upcoming Smartphone, Online Platform

Sony is leaking customers to Apple, with gamers increasingly turning toward the iPhone and away from the PlayStation. Apple iPad users and e-reader enthusiasts, too, are expected to cut into Sony Reader profits.
 
To combat this, Sony is developing a lineup of handheld products, which includes a smartphone capable of downloading games and a "multifunction device," as well as a new online media platform intended to take on Apple iTunes, the Wall Street Journal reported March 5.
 
The platform will reportedly launch in March, while the new devices will arrive later this year.
 
"Sony producing a new lineup of connected mobile devices is a very logical move, it provides Sony with the opportunity to refind its mojo," Peter King, an analyst with Strategy Analytics, told eWEEK. "In the converged space of connected mobile devices, currently occupied by netbooks, smartbooks, tablets, mobile Internet devices and e-book readers, there are few companies with the breadth of technology experience as Sony, which has CE, Vaio and smartphone [SEMC] expertise."
 
King said that while these categories have previously been in silos, CE, PC and mobile are now meeting in the 4- to 10-inch-screen space, which will "explode" in the coming years.
 
"There is no leader in this space, it is up for grabs, and it's time for Sony to show us what it can really achieve. Sony Online Services is not their first attempt; they ran a service called Connect for around five years, which was quietly withdrawn," King said. "If they have learned lessons from that regarding usability, and they can harness their wide range of digital assets into one platform, then they will be positioned well for the future."
 
Sony's smartphone effort will arrive under the Sony Ericsson branding - which is a 50-50 partnership with the Swedish L.M. Ericsson Telephone Co. - though according to the Journal, Sony will play an untraditionally active role in the phone's development.
 
The Sony Ericsson brand, too, has suffered of late. In the fourth quarter of 2009, it shipped 33.9 million handsets, according to a Jan. 29 report from Strategy Analytics, which described the figure as a "largely expected" 40 percent drop from the same quarter a year earlier.
 
Still, analyst Neil Mawston wrote in the report that the manufacturer was focused on "value as much as volume," and that, "after slashing thousands of jobs and trimming production capacity across the globe, Sony Ericsson has rightly become a leaner organization and its chances of finally returning to profitability in the next one to two quarters have increased."
 
Specifications and pricing details about the new phone have not yet been released.
 
Whether or not the phone is a success, Roger Kay, principal analyst with EndPoint Technologies, finds Sony, in its new pursuits, to be quite late to the party.
 
"I don't have a lot of faith that Sony will get this right," Kay told eWEEK. "Since a lot of the dynamic of establishing central marketplaces derives from the existence of a large pool of buyers (in this case consumers) and sellers (in this case Apple and its developer community) being already in place, it is very hard to dislodge an existing central market like the iTunes store. People go there because they expect to find the best access and richest set of offerings."  
 
Google, Palm, Nokia, BlackBerry, Samsung, Microsoft and others have all learned this well, as their application marketplaces offer nowhere near the number of offerings in the Apple App Store and see nowhere near the traffic. On Feb. 25, for example, Apple's iTunes store celebrated the lucky downloader of its 10 billionth song. 
 
"Developers find the most seats and consumers find the broadest array of content," Kay added. "Such marketplaces suck the oxygen out of other, nearby, less-established markets - like whatever Sony plans to put in place."