The Next Handheld War: Sony vs. Sony?

This handheld has an advanced operating system, Bluetooth connectivity, and can surf the Web wirelessly. But is it a Sony Cli&eacute or Sony Ericsson smartphone? That's one of the questions that company executives will have to weigh as its sleek new Cli&e

With the release of the much-anticipated PEG-UX50 handheld this fall, Sony executives have stopped playing fetch with their Aibos long enough to recognize that handhelds are ideal for communications. In doing so, the company has followed the design advice I recently laid out for makers of these devices. By adopting a landscape form factor, the new Cli&eacutes should render Web pages and e-mail with better fidelity, and display most photos and video without requiring users to rotate the device.

As I noted in that column, Im still skeptical of the Cli&eacutes twist-and-flip orientation, but it may be a viable mode for at least enjoying media or reading information.

The Clié PEG-UX50 has also attracted attention for what I call the "make room" pricing strategy; it fits into your pocket by reducing the thickness of your wallet. At a price of $700, the device is the first to feature both integrated Wi-Fi and Bluetooth in a Palm OS-based device. A version without Wi-Fi will cost $100 less. However, many have overlooked that the PEG-UX50 wont even be the most expensive handheld in the Clié line; that distinction goes to the PEG-NZ90 at $800 without Wi-Fi. It remains to be seen if Sony will be able to match the noteworthy battery life Palm has had in its flagship handheld, the Wi-Fi-enabled Tungsten C.

The PEG-UX50 signals another design win for PalmSource, which has spent the past year showing the world that its licensees can stuff its platform into mold-breaking device ranging from wristwatches to GPS devices. However, it may be a warning shot across the bow of Symbian, which has won broad support from Sonys cellular handset venture Sony-Ericsson.

Similar Features, Different Face

While Sony-Ericssons P800 has a different form factor than the Clié UX-50, on paper their feature sets seem strikingly similar—PIM, games, e-mail, digital music player, Web surfing, Bluetooth, Memory Stick (Duo on the P800), and a miserable integrated camera.. That leaves its integrated cellular (GSM) radio and the accompanying voice features, and a keyboard as the only major distinctions. However, Sony is already making overtures that future Cli&eacutes may have cellular radios in them. This would represent a big step forward from the failed Milo add-on Sony previously offered for its handhelds.

At that point, how will the consumer electronics giant position each product family? Will it rely on voice features? Will it distribute the products in different channels? Or does the new Clié portend that Sony may be buying out its partner Ericsson in its cell phone venture?

Most projections have shown handhelds remaining a niche market in the wake of enormous cell phone volume. However, while Sonys cell phone venture continues to flounder, the Clié line consistently ranks near the top of the handheld market share charts.

Competing products in multiple categories run through the veins of Sony. For example, its Handycam camcorders now take high-resolution digital stills, although the video cameras do not provide nearly the quality of even the entry-level Cybershot digital still camera. Sony also fights on both opposing sides on the digital music content protection issue with the conflicting interests of Sony Electronics and Sony Music.

However, the handheld battle is not a media format war, and the competition isnt just between rival product groups within Sony. With Palms recent acquisition of Handspring, the PDA pioneer has cast aside its voice phobia and can now offer an integrated product family to multiple channels under a single brand. Thats going to put pressure on Sony to get its mobile communications strategy in hand.

Will Palm have an advantage offering both handhelds and smartphones? Will the twain never meet at Sony? E-mail me.

Wireless Supersite Editor Ross Rubin is a senior analyst at eMarketer. He has researched wireless communications since 1994 and has been covering technology since 1989.

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