Sony Electronics said Tuesday it won't release new models of its Clie handheld computers in the United States this year, effectively signaling its exit from the U.S. market.
The consumer electronics giant said it will continue product development and sales in Japan but that its efforts in the United States will end when it sells existing supplies of four Clie models.
"Sony is taking this time to examine the conventional PDA [personal digital assistant] business and how it will transition into the future," the company said in a statement.
Sony Electronics, the San Diego-based unit of Japan's Sony Corp., had 8.4 percent of the worldwide PDA market in the first quarter, down from 12.2 percent for all of 2003, according to market researcher Gartner. The company has lost ground to palmOne Inc., maker of the Tungsten T3 and Zire 72 hand-held computers. PalmOne, like Sony, uses the Palm operating system.
Sony didn't elaborate on the reasons for its withdrawal but Gartner analyst Todd Kort said it was increasingly difficult for the company to continue investing in what was probably a money-losing business. He expects Sony's decision to end sales in the United States will lead to a worldwide withdrawal.
"Rather than pull the rug out in one day, they're going down gently," said Kort. "Japan is not a big enough market for them to limp along with."
Sony shipped about 1.4 million PDAs last year, only 150,000 of them in Japan, according to Gartner.
Sony's withdrawal is a blow for PalmSource, the handheld software maker that counts Sony among its biggest licensees.
Shares of PalmSource tumbled 11.9 percent, or $2.41, to close at $17.84 Tuesday on the Nasdaq Stock Market.
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