Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.
+1 212 318 2000
Europe, Middle East, & Africa
+44 20 7330 7500
+65 6212 1000
Posted by: Kenji Hall on June 29, 2009
Is Sony finally taking aim at Apple’s iPhone? Over the weekend the Japanese business daily Nikkei reported that Sony plans to form a skunkworks team whose job it will be to design a hybrid video game-cell phone gizmo—one that taps the company’s years of producing PlayStation Portable gaming consoles and Sony-Ericsson handsets. A spokeswoman at Sony wouldn’t confirm whether the report was true, and would only say that executives were considering “various possibilities.” Combining elements of a PSP and handset would seem a “natural process of thinking,” the spokeswoman said, without elaborating.
This comes as a bit of a surprise. CEO Howard Stringer has often talked about Apple as one of a new crop of competitors that also includes Hewlett-Packard and Microsoft. But in the past Sony has made a point of not making me-too products—even when those products go on to become hits. (No surprise there: Its engineers in Japan are too proud of their heritage to create a product that is a knock-off of a competitor’s.) That’s not a bad thing. Consider how many iPhone look-alike handsets have appeared in the past couple of years. None has even come close to the iPhone’s popularity.
The iPhone has shown how a cell phone can also work as a compelling gaming device: Of the 50,000 programs available on the iPhone through the App Store, games account for the biggest chunk, or about a fifth of the offerings. Many are given away for free or sell for just 99 cents. That, no doubt, riles Sony’s gaming division. Sony’s PSP has lagged Nintendo’s DS portable gaming console since the two machines were launched in late 2004. And sales of Apple’s iPhone, which was released in mid-2007, are fast closing the gap with the PSP.
If Sony has the iPhone in its sights, the question facing the Japanese tech giant is: Can it develop a phone that did more and generated more buzz than the iPhone? The jury is out. Sony’s best efforts to end the iPod’s dominance in portable media players can only be rated a mild success, at best. Coming up with software that rivals Apple’s iTunes continues to be Sony’s biggest challenge. (Sony isn’t alone, either.)
Rumors that Sony was working on a PlayStation cell phone first cropped up two years ago when Sony’s engineers filed a patent describing such a gizmo. The Internet rumor mill went into overdrive again in April, after Kazuo Hirai, who had led Sony’s video game division, was named as the head of a broader portfolio of networked products and services. The PlayStation Network is Sony’s biggest success story in online services. Under Hirai, the PlayStation group has rolled out online downloads of music, movies, TV shows, games and created a content platform for developers to create applications and games, sell videos, and post trailers and sneak previews. It’s clearly the model that Sony wants other divisions to emulate.
What’s unclear is why the video game group might have rejected having the PlayStation brand extended to Sony-Ericsson’s products in the past. (Sony says that’s not what happened but it hasn’t offered an explanation, either.) Sony’s gaming team could have been wary of such a product after Nokia’s failed attempt with the N-Gage gaming phone. Cell phone chipmaker Qualcomm also showed off a prototype, dubbed Slingshot, of a clamshell phone with a screen that swiveled around to reveal buttons and a joystick and could hook up to a TV but the concept went nowhere. One of the things that had made a PlayStation phone seem unlikely in the past was that fact that the PSP allow Net voice chat software Skype (over a Wi-Fi network). Still, Skype would seem a small thing to prevent Sony from pushing ahead with a PSP phone.
BusinessWeek’s team of Asia reporters brings you the latest insights on business, politics, technology and culture from some of the world’s biggest and fastest-growing economies. Eye on Asia’s bloggers include Asia regional editor Bruce Einhorn, Tokyo reporter Ian Rowley, Korea bureau chief Moon Ihlwan, Asia News Editor and China Bureau Chief. Dexter Roberts, and Hong Kong-based Asia correspondent Frederik Balfour.