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Week in review: Requiem for the handheld?

Sony announces it will scale back its Clie handheld line and bow out of the U.S. and European markets for PDAs, lengthening the shadows over the aging design.

Is the end at hand for the PDA?

That was the concern this week as Sony announced it will scale back its Clie handheld line and bow out of the U.S. and European markets for PDAs (personal digital assistants). The consumer electronics giant, which entered the PDA market in the United States with its Clie in August 2000, plans to continue to sell Clies in Japan.

The move is bound to create some upheaval in the handheld market, as Sony, meanwhile, turns its attention to expanding its Vaio computer brand. Other companies, including Hewlett-Packard, Dell and PalmOne, are sure to fight it out for Sony's stake in PDAs. And PalmSource is left to figure out how to handle the loss of one of its largest customers for the Palm OS. Sony pledged to continue to support PalmSource, but analysts said the software maker could take a revenue hit nonetheless.

Sony's decision isn't a big surprise. The popularity of the personal digital assistant has been steadily eroded by smart phones, digital cameras, music players and other devices that can provide many PDA functions. So today, the question isn't why Sony is getting out of the market--but who will be next.

Expanding Sun
Sun Microsystems made several moves this week to keep the heat on its competition. Jonathan Schwartz, the company's No. 2 executive, kicked off that effort by extending his unusual pricing plans from the software group to the rest of the company. Schwartz's software pricing plan allows a customer to use as much of Sun's server or desktop software as it wants, paying according to how many employees it has.

The company extended that plan to storage, announcing that it will sell customers access to a top-end StorEdge 9980 system, operated and owned by Sun, for $1.95 per gigabyte per month for a three-year subscription commitment. The price includes storage management software and support services and increases by $1.50 for better management or $2 for a mirror-image storage system.

Sun plans to continue its tilt toward the open-source world by giving its proprietary Solaris server operating system an open-source flavor, but Schwartz declined to give a timetable for the shift.

"I don't want to say when that will happen," Schwartz said. "But make no mistake: We will open-source Solaris." The declaration is another indication of the company's grudging acknowledgment of the rising popularity of open-source software such as Linux, which presents an opportunity for Sun to undercut rival software maker Microsoft but also poses a competitive threat to Sun itself.

Sun also said that it and Fujitsu will merge their server lines that are based on Sparc processors. The shift will take place by mid-2006, the company said. Sun and Fujitsu currently sell servers that use two different chip families, Sun's UltraSparc and Fujitsu's Sparc64. The chips can run the same software, including Sun's Solaris operating system, but require different hardware designs.

Fujitsu already sells Sun's UltraSparc designs, but as part of the new agreement, Sun will also sell Fujitsu's Primepower systems during the transition period to the joint product line. The move comes as Sun struggles with its third major round of layoffs in three years and with declining revenue, despite a growing server market.

Finding harmony
The recording industry is testing technology that would prevent consumers from making copies of CD "burns," a piracy defense that could put some significant new restrictions on legally purchased music. Tools under review by the major labels would limit the number of backups that could be made from ordinary compact discs and prevent copied, or "burned," versions from being used to create further copies.

If implemented widely, the new technology would mark a substantial change in the way ordinary people can use purchased music, possibly alienating some customers, analysts said. Given the costs of piracy, however, the labels are moving ahead cautiously in the hope of striking on a formula that works.

Toshiba plans to release a 60GB version of its 1.8-inch hard drive, potentially paving the way for higher-capacity iPods from Apple Computer. The 60GB drive is due out in late summer or early fall, according to a U.S. representative for Toshiba.

Apple does not comment on future devices, but the company has historically gobbled up new capacity as it becomes available, boosting the upper reaches of the iPod's storage, which now tops out at 40GB.

Also of note
Microsoft released the first test version of its new Windows Media Player software, a significant upgrade aimed squarely at the burgeoning portable device market...An Amsterdam court has ruled against Microsoft in its attempt to obtain an injunction against Lindows, a maker of Linux software, as the two companies' trademark dispute continues...Researchers contend that potentially dangerous elements of brominated fire retardants are turning up in dust samples swiped from computers...Intel will work with CollabNet to release open-source code designed to make the boot-up process for PCs and servers faster and more predictable.