Sony Prepares For A Come-From-Behind Defeat

The Holy Grail of consumer electronics devices is one that would combine the best features of the Apple (AAPL)  iPad, iPod, and iPhone. Sony (SNE) means to introduce products to challenge the Jobs & Co. devices. The Japanese firm has no other choice. It needs to at least try to be a force in the markets which are dominated by Apple, Nintendo, and the Amazon (AMZN) Kindle, especially after the huge success of its Walkman in the Eighties and early Nineties.

The Wall Street Journal reports that Sony has developed a smartphone that can download and play PlayStation games. Another project by the Japanese company aims to build a device that is a combination netbook, e-reader, and portable PlayStation. The Journal says that Sony will also launch a challenge to iTunes.

Sony is too far behind the companies which have come to dominate the portable handset and consumer electronics device industry. The sector includes successful Apple, RIM, Ninetendo, and Microsoft’s (MSFT) Xbox products. But, it also has a number of companies which are trying to elbow their way to market share, a list which includes Motorola (MOT), Nokia (NOK), Palm (PALM), LG, and Samsung. Some of these firms have significant sales for their current products and brands that allow them to introduce new products that are likely to get some degree of consumer acceptance. Even the failures like Palm eat up a certain amount of market share.

Sony’s PS3 is third in market share among game consoles, so the Japanese firm is already a failure in the business. Sony tried to enter the PC business with it Vaio line. Vaio has a negligible share of the PC market. Sony proposes to enter several new consumer electronics markets that are already terribly crowded and it proposes to make the move with a brand that no longer stands for much with potential customers.

Taken as a group, Sony has too many hurdles to overcome

Douglas A. McIntyre