Sony, one of the electronics giant, announced that it will drop out of its handheld market in US and Europe. This comes as a major shock to many consumers, Sony's partners in the handheld division, and Industry Analysts. Sony plans to exit its international (US and Europe) markets and continue to approach its Japanese market, where Sony is at the number one position. According to IDC, Sony is the second largest handheld seller in US and Europe. Sony reports that it will not announce new models of its PDA this fall. The company wants to closely analyze the PDA market at this point, hence the reason of exiting the market. The multimedia giant will continue to develop and sell PDAs for its Japanese market.
Spokesperson from Sony reported that the company will continue to provide tech support and honor warranties for its current products. The spokesperson also reported, once the manufacturing for future products stop and the inventories sell out, the company will not restock the market with new products.
Sony entered the PDA market in August 2000 and after working hard for a long time, the company has decided to back down from the market. According to online reports, Sony released two products compared to its competitors who released only one product during the same frame. Sony
was also the first one to announce PDAs with MP3 and built-in camera capabilities.
Sony plans to work in the wi-fi area with its PDA market.
IDC Analyst Kevin Burden said to News.com, "I'm a little surprised Sony would exit, given its strong position."
PalmSource, OS maker for Sony's PDAs, has suffered significant loses in the market with its shares since this news. After Sony's news of its further actions in the PDA market, PalmSource's shares dropped to $17.63, which is close to a 13% drop. PalmSource accounted 14% of its revenue from Sony last quarter in licenses.
PalmSource did not comment on the effect Sony's actions will have on the company, but did say that PalmSource's market shares has dropped in the past few quarters, however, growth is expected in the upcoming quarters.
NPD Analyst Stephen Baker stated that Sony's expensive handhelds were not within reach for most consumers.
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