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Sony's handheld plans start to take shape

The electronics giant is quietly gearing up the strategy behind its entry into the handheld market, developing a family of devices that will compete with other Palm licensees.

Sony is quietly gearing up the strategy behind its entry into the handheld market, developing a family of devices with features that will compete with other Palm licensees.

The company has been characteristically tight-lipped about details of the device, saying only that it is developing a PDA (personal digital assistant) with multimedia and wireless capabilities, based on Palm's operating system, which it licensed from the handheld company last year. The company declined to comment on specifics of the device.

But sources say the consumer electronics giant is in fact designing a family of devices spanning a range of market segments and target customers. Sony is said to be developing a line of digital devices focused on wireless communication and capable of interacting with, and even controlling, in some cases, other Sony products, such as TVs and VCRs, via infrared ports.

The company, which pioneered the portable digital music market with the Walkman 20 years ago and led the charge to sleeker industrial designs in notebook PCs with its Vaio portable computers, should not be underestimated in its first foray into the PDA world, analysts say.

"It's very simply the brand name," said Matt Sargent, a handheld analyst with market research firm ARS. "When a substantial name gets behind a technology, it adds legitimacy."

Sony's moves to date, especially its dual licensing agreements with Palm and the European Symbian consortium, indicate the consumer electronics company is looking far beyond the PDA market. Sony is clearly positioning itself to play in the market for wireless voice and data products, including smart cell phones and handheld computers, as these types of devices become a more popular and easy way for the masses to connect to the Internet.

"Sony really is a consumer marketing company," said David Thor, research director of ResearchPortal.com. "Sony is looking at the consumer space first, and the messaging business is ultimately going to be consumer-led."

This fall, Sony will introduce a sub-$200 PDA with color display, limited wireless Internet access, multimedia capabilities and add-on storage capabilities through its Memory Stick technology, sources say. At the same time, the company will likely announce another, lower-end device with more limited capabilities.

The family of products eventually will range from an inexpensive messaging device to a high-end voice-centric product with smart cell phone capabilities, sources say, which can easily be adapted to a range of operating systems, including Palm and the Epoc OS from the Symbian group.

This first device, which will look like a typical PDA, will most likely include the limited wireless messaging capabilities of the Palm VII.

As part of its strategy to include wireless Internet access of some form in all of its products, Palm is expected to revamp the Palm VII late this summer, coinciding with the release of the Sony device, to include improved messaging and always-on capabilities.

These devices will use Sony's Memory Stick technology and offer more robust multimedia functionality than current Palms, sources say, including digital audio imaging applications.

The company is simultaneously working on a sub-$100 messaging product, sources say, capable of two-way messaging. This device will offer line-of-sight communication with other Sony devices and products, which may include the PlayStation gaming console, through the infrared port.

Eventually, Sony is expected to begin offering smart cell phones, based on Symbian's operating system, which is thought to be more extensible than Palm's and more suited to operate cell phones and voice-centric devices.

"If you're making something that size and shape, people associate it with Palm. There's brand recognition that goes along with Palm," Thor said, noting that Palm may update its operating system to support more applications in the future. "But the Symbian OS is more suited to a hybrid product; it's much more flexible."

Set to be introduced as early as September, the low-end PDA has all the makings of a "Handspring killer," according to Thor, referring to another Palm licensee selling the Visor PDA to non-tech savvy audiences. Sony's retail presence is much stronger than Handspring's, which just entered the retail market last month.

Sony is most likely to take sales away from Handspring rather than Microsoft, which has been gaining momentum recently with the release of its PocketPC, Sargent said.

"This is really a different category," he said, noting that most Microsoft buyers are high-end gadget lovers, while Sony is attempting to appeal to mass-market consumers.

"All it's going to do is prevent Microsoft from going into a new space in the future," he said.