Sony announced today that it would exit the the PDA market in the United States and Europe. It appears, however, that the electronics giant will continue to offer Clie handheld models in Japan.

In Japan, Sony commands around fifty percent of the PDA market, while its overall share in other areas has dropped considerably as of late. While it is leaving the hanndheld market in the U.S. and Europe, Sony said it will honor all Clie handheld warranties and deliver software updates. The last Clie model to be released in the U.S. was the Clie PEG-TH55, which PDAStreet is in the process of reviewing.


Clie PEG-TH55

No doubt the continued decline in the overall PDA market as well as Sony's shrinking share of the market contributed to Sony's decision. IDC reported back in April that Sony saw its PDA market share drop to single digits at 9.3%, while Gartner placed the number even lower at 8.4 percent.

With Sony's departure, PalmSource, the Palm spin-off in charge of the Palm operating system, is left with only one major licensee in palmOne, the number one selling handheld vendor. While palmOne will surely gain Sony customers not willing to leave the Palm platform, Microsoft and its Windows Mobile licensees, including Hewlett-Packard, Dell and Toshiba, are now well positioned to take the lead in overall PDA sales.

As a matter of fact, last month Gartner reported that PalmSource and Microsoft were in a virtual tie in shipments in the first quarter of 2004. According to Gartner, Palm OS shipments declined by 20.7 percent in the first quarter of 2004 compared with the same period last year. Palm OS market share slipped to 40.7 percent, while the Windows CE market share increased to 40.2 percent. Microsoft licensees have been steadily chipping away at the Palm OS lead since 2000, when Microsoft accounted for only 11 percent of the PDA market.

"The decline in Palm OS market share in the first quarter of 2004 is not unexpected because many Palm OS users have delayed PDA purchases until they can evaluate PalmSource's upcoming operating system Cobalt," said Todd Kort, principal analyst in Gartner's Computing Platforms Worldwide group. "Palm OS has also been impacted by Microsoft's bundling of Outlook with every Pocket PC, and the preferred status that Microsoft Windows enjoys with enterprise application developers."

Sony first liscened the Palm operating system back in 1999, releasing its first handhelds, the Clie PEG-S300 and PEG-S500C in 2000. From that point on the company continued to innovate on the platform, delivering several unique and powerful devices that attracted a dedicated following.


Clie PEG-S320

For example, the introduction of the Clie NR series, the Clie NR70 and NR70V, a couple of years ago revolutionized the way one looked at handhelds with their built in keyboards, larger screens, and unique hinged design that allowed the keyboard to rotate. The NR70V was also one of the first PDAs to integrate a digital camera.

Clie PEG-NR70V

You could also count on Sony releasing more PDAs in one year than any other manufacturer, only recently reducing the rate at which it releasing new devices. In all, Sony unleashed over twenty handhelds.

While it looks like Sony won't pull the plug on its 10 million dollar investment in PalmSource, the company has come a long way since its chairman and CEO, Nobuyuki Idei said he would be more than happy to acquire PalmSource, then a part of Palm, early last year.