Jon Fortt
January 20, 2003
Jan. 20--In a handheld computer market struggling through the tech
downturn, Sony has cranked out new Palm-based gadgets as feverishly as the
television networks have invented new reality shows.
Seventeen products in 2 years -- more than one every two months.
Sony says it doesn't plan to slow down this year.
But that is not why Keiji Kimura is smiling. Kimura, a top Sony executive
responsible for such products as Vaio laptops, camcorders, digital cameras and
the Walkman, is watching his Sony Clie brainchild start 2003 with something
that had eluded it until now: momentum.
This year Kimura wants to use that momentum. While competitors are
pushing phone/organizer hybrids, Sony is making a brazen move toward its
specialty: entertainment.
An apparent departure from its sleek tendencies, Sony's latest could be
called the SUV of Palm-based handhelds -- the 10.3-oz $800 PEG-NZ90 includes a
built-in 2-megapixel digital camera.
Though rival manufacturers using Microsoft's Pocket PC operating system
have been criticized for building hefty, feature-laden devices, Sony thinks it
has crafted a multi-use tool that will strike a chord with consumers. If Sony
is right, it will continue an impressive winning streak.
For most companies in the business of selling Palm Pilot-like handhelds,
calendar 2002 was a so-so year. In the third quarter for example, Gartner
Dataquest said Palm, the category leader, saw its share of the worldwide
market grow, as profits returned and consumers clamored for its low-cost
devices. Hewlett-Packard's handhelds lost ground. Newcomer Toshiba gained, but
still had a small position. Handspring, once a power player in the category,
tumbled.
And then there was Sony.
"Sony probably had the best year of any particular PDA company," said
Todd Kort, analyst at Gartner Dataquest. "Their year-over-year growth rate is
just incredible."
In the third quarter, shipments jumped nearly fourfold from the year
before, from 91,000 to nearly 345,000. Sony finished the year poised to become
the No.292 manufacturer of handhelds, behind Palm and ahead of HP.
Sony climbed from 3.5 percent market share in 2001 to 13.5 percent in
2002. The Clie became a bionic poster child for Kimura's Mobile Networking
group in 2002, with models adopting the rotating neck of a Sony camcorder, the
picture-taking eye of a Sony digital camera, the wireless networking brains of
a Vaio laptop, and the listening ear of a Memory Stick voice recorder.
Now Sony is pushing that a step further. Coming off the success of 2002,
Kimura is beginning 2003 with a move that at first appears patently un-Sony.
The man in charge of a division known for streamlined, miniaturized designs --
the electronics industry equivalent to a Porsche sports car -- now has the
handheld sport-utility vehicle.
The NZ90 is a Clie the size of a pocket dictionary that weighs twice as
much as mid-range Clie models.
Granted, the NZ90 has the capabilities of a laptop and an organizer
combined -- and the 2-megapixel digital camera is good enough to reliably turn
out 5x7 color prints, or high-quality MPEG-4 video.
"You can't keep the same size if you're going to have MPEG-4 camcorder
capability and a battery to run it," said Richard Doherty, director of
research at Envisioneering Group, a tech consultancy. "Something has to give
if you're going to make a multimedia device -- and an incredibly powerful
multimedia device -- out of what started out as a calendar scheduler."
Which is why the NZ90 might not be so un-Sony after all. Kimura isn't
trying to build bulky handhelds; he's trying to change the way people think
about handheld computers, or personal digital assistants as some call them.
Today, handhelds tend to serve as digital datebooks that store calendars
and contact information. The function is called personal information
management (PIM), and Sony is tired of it. The Clie as just a fancy-looking
datebook is not a big market, Kimura said, especially compared with the latest
cell phones, which can store PIM, make calls and send messages.
"When we decided to get into the PDA space, the hot model was the Palm
V," Kimura said, referring to the sleek device that made people think
differently about what a handheld could look like and do. "We should remember
how much that can expand the market."
Kimura's opinion on the Clie matters a lot, and not just because he is
the Sony executive most responsible for driving the future of portable
technology.
Four years ago Kimura and his direct superior, Sony President Kunitake
Ando, together decided to move ahead and create a handheld computer. It would
run the Palm operating system instead of software from Microsoft.
"We can put everything in it," Kimura recalls thinking at the time.
"That's a perfect product that we have to do."
And it wasn't because he saw loads of quick money in handhelds. It was
because Sony and handhelds made a great couple.
Sony, a global powerhouse with more than $60 billion in annual sales from
electronics, movies and music, is of course a hard-nosed and savvy business.
But it is also a confederation of technophiles who are aware that one of the
company's strongest assets is its mystique -- the sense that it can build
impossible dream gadgets.
For example, two years ago Sony engineers presented the top brass with a
tribute, the latest fruit of their labs: a digital camera the size of a
five-pack of gum that could store images on a wafer-sized card called a Memory
Stick. Sony executives loved it so much that Fujio Nishida, president of Sony
Electronics, showed a prototype to a select group of media when he came to San
Francisco -- just to demonstrate that Sony intends to retain its title of
Global Creator of Cool Stuff.
Ando, Sony president, has said that its Aibo robot dog was never about
making a profit so much as it was about awakening the world's imagination.
While the Clie is a bit more realistic, some at Sony acknowledge that at $800,
the NZ90 is something like the concept cars at auto shows -- a demonstration
of Sony's engineering prowess, and a promise of the features that will
eventually come to smaller and less expensive devices.
"Miniaturize, that's Sony's DNA," Kimura said. "Make a smaller one.
Miniaturization, it's a very simple thing. It's a natural human being thing.
If it's a big one, I want to miniaturize it and take it with me. That's a good
motivation for us."
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(c) 2003, San Jose Mercury News, Calif. Distributed by Knight Ridder/Tribune Business News.
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