Sony Phones In a Strategy

Apple (Nasdaq: AAPL  ) has the iPhone. Research In Motion (Nasdaq: RIMM  ) has the BlackBerry. Palm (Nasdaq: PALM  ) has the Pre. Nokia (NYSE: NOK  ) has the N-series. Even Microsoft (Nasdaq: MSFT  ) wants in on the smartphone market. Is there really room for another competitor?

Sony (NYSE: SNE  ) apparently thinks so. Japan's Nikkei Business Daily reported over the weekend that the electronics maker was planning a cellphone/game console hybrid. News.com later reported that Sony wants to make its popular PSP handheld the basis of a new smartphone.

At least Sony isn't afraid to zig as others zag. Apple has done well by avoiding convergence, keeping the iPhone and iPod lines separate. As a result, the phone-free iPod Touch has grown into a popular platform for portable gaming. Sony should see that as a threat.

But is creating a PSP Phone the right response? Possibly. Apple may prefer distinct product lines, but there are other areas in which entertainment devices are converging. Consider the Xbox 360, a game console that also plays and downloads movies.

Yet this may be a poor comparison. Smartphones aren't toys -- they're designed for serious business. Even the iPhone, originally assailed as a high-priced toy, is winning corporate customers. An estimated 12% who bought the new iPhone 3G S switched from the business-user-friendly Blackberry.

A PSP Phone may not need to attract business adopters, especially if teens with disposable income like the gadget. But that means convincing them Sony is as cool a supplier as Apple and Nokia, among others.

Good luck with that, Sony.

Brrrrrring! It's related Foolishness calling:

Apple is a Stock Advisor selection. Microsoft and Nokia are Inside Value picks. Try any of our Foolish newsletter services free for 30 days.

Fool contributor Tim Beyers had stock and options positions in Apple and a stock position in Nokia at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Twitter as @milehighfool. The Motley Fool is also on Twitter as @TheMotleyFool. The Fool's disclosure policy is done playing around, Wall Street.


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