Sony has decided not to launch any new Clie personal digital assistants in the US for the rest of the year.
"Sony continues to view mobile devices as a key pillar to our core business strategy. Presently, Sony is reassessing the direction of the conventional PDA market, and Sony will not introduce any new Clie handheld models in the US this fall," the company said.
"Product development and sales continue for the Japanese market only. Sony is taking this time to examine the conventional PDA business and how it will transition into the future."
Sony shipped just over 100,000 Clie units in the US during the first quarter of 2004, good enough for third place overall according to IDC research. This was a little less than half of Sony's worldwide shipments in the same period.
However, Sony's first-quarter shipments worldwide plunged 49.6% compared with the first quarter of 2003 amid a larger industry decline of 11.7% over the same period.
PDA users are, increasingly, opting for mobile phones and converged smartphone devices when upgrading from their older handhelds, said IDC analyst Alex Slawsby. Voice capability is quickly becoming the must-have application in a handheld device.
Sony has already mapped out a mobile phone strategy through its joint venture with Ericsson, and there was little sign that the Sony Ericsson team collaborated with the Clie team, Slawsby said.
Sony Ericsson has made a strong commitment to the Symbian operating system, while the Clie was the highest-profile Palm OS licensee outside of PalmOne.
Additionally, Sony built the Clie brand on the PDA's multimedia features and striking design, rather than communications features such as Wi-Fi chips that were only added in recent models.
"Sony has pushed [the market] in all sorts of directions, but this is not a category that's expanding," Slawsby said. "We don't expect anything to turn this trend around: the mobile phone is of a higher priority [to US users]."
Sony released about 30 Clie handhelds over a three-year period, said Todd Kort, principal analyst with Gartner. The plethora of new models flooding the market alienated some customers who did not want to buy a new handheld because a new and better one would arrive within a few weeks, he added.
Sony's decision has a substantial impact on PalmSource, developer of the Palm OS, Kort said. With Sony's departure from the US market, PalmSource now gleans about 90% of its business from PalmOne, about eight months after the two companies formally separated in a strategy designed to foster their independence.
"Almost in effect, they're back together again," Kort added.
Sony will continue to honour warranties and support contracts for US customers.
Tom Krazit writes for IDG News Service