Sony's Clie: The newest PDA contender

The consumer products heavyweight enters the white-hot PDA market. And Palm could take a beating

Sony Electronics enters the PDA ring Wednesday with the introduction of its new Clie. Packing the one-two combination of Palm's elegant operating system and Sony's consumer know-how, Clie competitors can expect some bruises.

When Sony decided to use the Palm platform, it expected to grow the market for personal digital assistants. But analysts familiar with the Clie say that growth is unlikely because the unit's resemblance is too close to the Palm V, one the most popular products in the Palm line. Instead, analysts predict Palm V sales will get battered.

"One doesn't win without the other losing," said Rob Enderle, vice president at Giga Information Group. "There's not enough space for nearly identical devices. Sony's [Clie] will do significant damage to the Palm V's share."

Sony officials acknowledged some similarities between the Clié and the Palm V but said the Clie was just the beginning for the company and PDAs.

The name sounds sophisticated, possibly French. But Clie is actually an acronym for "communications, link, information and entertainment".

Two versions of the Clie, the monochrome PEG-S300 and color PEG-S500C, are already shipping in Japan.

Sony, which is manufacturing the device in Japan, plans to begin shipping the PEG-S300 in the United States in early September for $399.

But the PEG-S500C won't be available stateside until the first half of 2001. Sony officials said the delay was due to the limited number of color applications as well as panel shortages.

The Clie is slightly smaller than the similarly priced Palm V, which is two-tenths of an inch thicker and three-tenths of an inch wider than the Sony device. The JogDial scroll button makes it easy for Clie users to operate the device with just one hand, the company said.

The PDA uses a 20MHz Motorola Dragonball EZ processor with 8MB of on-board memory and 2MB of flash memory. An 8MB Sony Memory Stick is also included.

About the size of a stick of chewing gum, the Memory Stick is Sony's proprietary format for removable media, similar to SmartMedia and CompactFlash memory cards. It slides into a slot on the back of the Clie, where it can be used to store files and applications. The Memory Stick can be used in other Sony products, such as digital cameras and MP3 players.

The PDA will communicate with a PC primarily through a Universal Serial Bus (USB) connection, although infrared and serial connections will also be possible. The back-lit display has a 160-by-160-dpi resolution and a rechargeable lithium-ion battery will power the device.

The Clie will use Version 3.5 of the Palm OS. Bundled applications, in addition to the usual Palm PIM apps, will include MSGate, a Windows Explorer-like navigator for file management, the Pocket PictureGear photo viewer, and gMedia for viewing video clips.

Future plans for the device include expanding the Memory Stick slot with what Sony calls "Info Sticks". Company officials say the Info Stick will be similar in concept to modules for Handspring's Springboard slot, only they will be smaller and consume less power.

According to the company, over 50 developers are currently working on Info Stick products. One of the first, expected in early 2001, will be a Bluetooth Stick, which will allow PDA users to link their phones and PDAs.

"We feel that handhelds are the next big thing," said Kevin Mizuhara, Sony product marketing manager for handhelds. "We're looking to include more multimedia [features] and we're working with Palm to enhance the platform."

Expanded multimedia capabilities are due in 2001, Mizuhara said. The disadvantages for the Clie are the audio and video limitations of the Palm platform, said Enderle of Giga Information Group. But the Sony name will be enough for the company to trim 7 percent to 9 percent of Palm's market share, currently estimated at roughly 65 percent of the market.

Sony could have gone after a larger piece of the pie had it introduced a budget-friendly device, which is what Handspring did last year -- capturing about 20 percent of the market. Instead, the company decided to launch a premium product.

Don't count the consumer electronics giant out of that segment, however.

Mizuhara says that if you look at the way Sony has marketed products -- such as the Walkman, with over 50 different types of offerings -- you can expect Sony to deliver other PDAs to address different users.

New models may be a ways off considering the shortage of key components, such as screens and memory.

Manufacturers blame the recent explosion in the number of people buying cell phones as the main drain on components, especially displays. Analysts estimate that tens of millions of cell phones are sold every week.

Palm has been hit particularly hard by the component shortage. Company officials say Palm products are selling in record numbers, and it can't keep up with the demand.

That may be an enviable situation for PDA manufacturers, but it has left consumers and manufacturers frustrated. Sony officials say that they have taken the shortage into account while planning the Clie launch. For example, the company is delaying worldwide shipments until early next year.

Analysts expect the Clie to bring in even more consumers.

"Sony has a much bigger audience that they speak to," said George Meier marketing director of research firm NPD Group, "and [component] shortages will only multiply assuming that they do the same promotion [with the Clie PDA] that they are known for. And if they didn't, it would be a surprise."

Check out what the Sony Clie will look like.

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