Sony called us with some sad news last week, and read an official statement telling us that there will be no new Clie models outside of Japan. While they'll continue to sell current models in the US, there will be no new Fall models. Sony will support existing models and stated that they will evaluate the market and consider manufacturing other portable devices not categorized as PDAs. Though they called us last week, we couldn't post the news until now because we were under NDA (non-disclosure agreement) until June 1, 2004 at 9am EST. Sony needed to notify vendors and other interested parties before this news became public. Surprisingly, Sony says they will not issue an official press release on this subject.
Sony Clies offered some of the most innovative hardware over the years, and certainly took Palm OS to the limit. What a shame that those of us outside Japan won't be able to enjoy their products. Despite their innovative designs, the Clie never took the lion's share of the PDA market. I've always been a big fan of their high end PDAs, which contributed greatly to the overall PDA market, raising the bar for multimedia features and design.
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After our conference call with Sony, we chatted with Todd Kort at Gartner to get his opinion on Sony's exit from the handheld market. Here were his thoughts:
On Sony:
- Sony had 20% of the Palm OS market in Q1, down from 25% in 2003, not good.
- Sony as a company is struggling financially. They need to concentrate on game consoles and games, and other bread and butter ventures.
- Sony is trying to buy MGM, which involves a great deal of money.
- The Clie's high end multimedia niche didn't pay off.
- They came out with 30 different models and that made for hard work to differentiate models.
- Innovation slacked, with the UX50 being the last innovative model, and that came out 1 year ago.
- Sony Clie models are expensive to produce.
- Sony didn't keep pace with PalmOne restructing and cost reduction.
- PalmOne products are cutting into Sony territory: T3, Zire 71 and 72.
- Only 160,000 PDAs shipped in Japan last year. Todd wonders how worthwhile PDA sales in Japan are since high end feature phones are king there.
On the PDA Market:
The PDA market peaked in 2001. 70% are purchased by individuals now, while that figure was 90% in 2001. Thus the enterprise side is still growing, Microsoft is doing well with the enterprise as is RIM with Blackberry. HP, Dell and RIM are doing well thanks to the enterprise. How do mobile phone sales compare to PDA sales? 600 million mobile phones will sell this year vs. 11 million PDAs.
On Palm OS:
There are 30 million Palm OS users. One problem is that there's no hugely compelling reason to upgrade these days. Color was the last important innovation back in 2001-2002.
Do you think palmOne will end up being a smartphone company? No. Look at the market, palmOne has the low end market to themselves, with Dell encroaching on the entry level $199 X30. Smartphone will be the growth area in a few years but they have a good number of years left in the PDA market.
Todd also stated that he believes that those who'd have purchased a Clie will instead buy a palmOne or perhaps Tapwave Zodiac PDA. He doesn't think that Sony's exit will cause Palm OS users to defect to Pocket PC.
Great article, but wow, what a sad day. Sony drew me out to upgrade from my Palm Vx to a Sony T615C because of their innovative hi res display and software. Competition always makes the market stronger. I think that Sony could have dominated the market if they had attacked the middle of the market point with continued innovation. Instead, they went with $799 PDAs? I can buy a full-featured laptop for that price! Result? I love my Tungsten|T3!
I agree, a sad day...I've had three Clies and while some of their foibles were truly maddening (like placement of function keys) they were always functional and a valuable asset. I will probably get a TJ37 before the end of summer, though I have to admit a T3 is tempting.
It is funny that Sony never really tried to do anything with PDAs at the lower end of the price spectrum, opting instead to push the upper price limit. Was I ever tempted? Of course, but never seriously...it's like their laptops (which I have owned one)...pricey and quirky...it's like someone in R & D never heard of focus/test groups.
Good article! I just wanted to pay a tribute to the high end clies. You've got to give it to Sony for trying the NX series, the NZ and the UX. Without these models, Palm PDAs would look much duller.
I owned a T-615c an NR70-v ALSO the NZ90 and last, after it (NZ90) was stolen last month, the UX50, to this day as a union building tradesman I still get the WOW factor from co-workers when checking an e-bay auction or e-mail at lunchtime. Sony is not perfect, but come on! a lazy no-frills palm device with no flare for innovation, no- WOW factor anymore, now we can all look towards dreary, ever so slowly moving companies like PalmOne and Blackberrys', to give the PDA markets their newest idea's, We will wait a long time to see out-of-the-box thinking like the designers of the NR70v,or NZ90 with its oh' SO KILLER of a CAMERA, I will miss the thinking so....
yeah...i also own a UX-50....the only problem i had with it was that i also own a mac. but that was solved with the missing sync...sometimes i think that i should've brought a palm, but im a proud UX-50 owner! sony....bad move..
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