Sony plans to sell the Xperia Sola, an Android Gingerbread-powered device, in the second quarter, as the company looks to rejuvenate its struggling smartphone sales with new features.
The Sola runs on 1-gigahertz dual-core processors and features a 3.7-inch Reality Display, 5-megapixel camera and 8-gigabytes of built-in storage. The device is also NFC-enabled, and comes in red, white or black. Sony says it will give the device an upgrade to Android 4.0 this summer.
One of the features that Sony hopes will set the phone apart from competition is "floating touch." The technology gives users the ability to interact with their phone by holding their finger slightly above the screen. By hovering their finger over the screen, owners can highlight links and text without ever making contact with the device.
"Floating touch" may be a fun feature, but it probably won't do much to help Sony sell phones unless developers commit to the technology. "Floating touch" could be used in games or utility apps to improve gameplay mechanics and functionality, providing owners of the Sola a truly unique experience they can't get anywhere else.
The Sola will also come with support of Sony's SmartTag system. Users can hit the SmartTags button and program it for up to 10 commands. For example, the SmartTag button could be used in the living room to activate users' Wi-Fi, and then used in the bedroom to put the handset on silent and set the alarm.
Sola's unique features like SmartTag and floating touch could set Sony's device apart from the myriad of other Android smartphone makers. The company aims to make a comeback in mobile phones after parting ways with Ericsson to build its own brand. Sony has fallen far behind manufacturers like Samsung, HTC and Motorola, and the Sola is part of a line of Xperia device it's banking on to make it relevant in the smartphone market.
The Sola has a few unique features, but unless developers merge them into games and apps, it may not be enough to help the smartphone stand out among other devices on store shelves.
Sony revamped its mobile strategy to integrate gaming and entertainment features, in the wake of the completed Sony Ericsson buyout.
The Japanese giant plans to merge its newly acquired mobile division into its electronics division, bolstering its product line-up and helping the company better compete in the smartphone market. The deal also fuels Sony's migration from low-end phones and puts a renewed emphasis on cutting-edge smartphones like its Xperia handsets.
The buyout figures into Sony CEO Kazuo Hirai's larger strategy to focus on producing high-end devices with unique capabilities that capitalize on Sony's strengths.
Hirai intends to "fully leverage Sony's diverse electronics product portfolio, in conjunction with our rich entertainment assets and growing array of networked services, to engage with our customers around the world in new and exciting ways," a goal the Ericsson deal will help reach by consolidating mobile operations and giving Sony full control over them.
The acquisition arrives at a critical time for Sony, as the company has weathered disappointing sales and a leadership overhaul. The Japanese company is struggling to stay afloat in a competitive market, and the deal confers vital advantages, like cross-licensing and integration opportunities.
Sony is already pursuing aspects of its strategy. This week, Sony granted PlayStation Certification to HTC, allowing the company's devices access to the cross-platform PlayStation Suite. Expanding this gaming suite, which was previously exclusive to Sony's smartphones, to some of the world's largest Android manufacturers is another way the company is getting its software into the hands of more customers and expanding its targeted gaming audience.
At the same time, Sony's decision to license its PlayStation Suite will likely bring the company revenue, which it can use to finance its higher-end smartphones. The company is fine-tuning these higher-end devices, and the licenses are expected to cultivate a market which Sony can capture with its own devices.
The Ericsson deal builds on this strategy since Sony can now employ its cloud technology and bring its gaming and entertainment holdings onto its handsets without working out deals with Ericsson.
Sony paid $1.29 billion for control of the company, which includes comprehensive cross-licensing agreements, and intends to rename the mobile company Sony Mobile Communications. The Ericsson deal was a necessary expense for Sony, as Hirai's plan hinges on substantial strategy shifts, and some of these changes may only be possible with the buyout.
HTC will be the first smartphone manufacturer with Sony's PlayStation Certification, a move that may hurt sales of Sony's Vita gaming device.
The agreement, which HTC will announce later this year, gives the company's devices access to the PlayStation Suite, a cross-platform gaming network. Users will be able to purchase classic PlayStation games on the PlayStation Store, playable on their smartphone and bringing console quality games to their device.
Until now, the PlayStation Suite was exclusive to Sony's smartphones, but the company announced last year it planned to license its software to other manufacturers.
Sony's smartphone business is struggling, and expanding the PlayStation Suite to some of the world's largest Android manufacturers is a good way to put its software into the hands of more customers.
The service will likely make HTC smartphones more attractive to gamers, giving them a niche audience many manufacturers aren't serving. Sony's classic PlayStation One games like "Crash Bandicoot" and "Spyro the Dragon" are classic titles that many players will want to revisit, and others will enjoy even if they're playing them for the first time.
Sony's decision to license its PlayStation Suite to smartphone manufacturers will likely bring the company a profit, particularly at a time when the company is struggling with lagging revenues, but it may come at the expense of its other gaming initiatives.
Sony plans to launch the PlayStation Vita in the U.S. next week, and the company is marketing the system as a portable device that gives gamers a true console gaming experience. The system has graphical capabilities beyond any portable device currently on the market, but at its $250 price point may scare off prospective buyers.
The Vita's primary competition is smartphones. Casual gamers, one of the fastest-growing segments in the market, are highly unlikely to spend big money on a dedicated portable gaming system when they can play games on a device they already own, and even some hardcore gamers are getting their fix on their iPhone and Android devices. The PlayStation Suite pays particular attention to this audience, allowing users to play classic console games of the past on a device that's already in their pocket.
Sony may have made the PlayStation Suite exclusive to the Vita, giving customers more incentive to buy its new handheld, much like Nintendo has done with its Virtual Console on the Nintendo 3DS. Instead, Sony is licensing the Suite to smartphone makers, and although it may allow the company to reach millions of potential customers, it also gives all but the die-hard gamer another reason to pass on the Vita.
Sony is looking to buy out Ericsson's share of Sony Ericsson, a move to gain full control and beef up development of the struggling handset unit.
Japanese-Swedish joint venture, a 50-50 partnership since 2001, is the sixth-largest handset maker, but has been losing profits in recent years as it held back on smartphone development. The two have had ongoing talks in the past, but discussions fell apart do to the settlement terms, according to the Wall Street Journal.
Analysts believe if Sony takes control of the company, it will spur the advancement of smartphones and handheld games, allowing Sony to streamline development.
Sony is pushing for a deal in hopes of duplicating the successes of companies like Apple and Samsung, who are ruling the market through their closely-related smartphones and tablets.
Last week, Sony Ericsson CEO Bert Nordberg said the company will become a 100 percent smartphone company by the middle of next year, aiming at becoming the largest maker of Android devices in the U.S. But the announced smartphone development still falls under the Sony Ericsson partnership, not as a separate function for Sony.
If Sony and Ericsson decide to part ways, the deal may all hinge on how much Sony wants to pay Ericsson to buy out its share. Market analysts believe Ericsson's side of the business could be worth about $1.5 billion because the transaction could include the Swedish company's mobile technology patents.
The purchase may further a possible strategy to combine mobile devices with its music, video and gaming lines, a much needed boost in the arm for a company late to the tablet market and trailing Apple and Samsung.
Sony and Ericsson may also remain separate entities, in which case Sony may go forward with smartphones and tablets that feature the company's top-ranked PlayStation brand, as has been anticipated for several years. The indecision about the partnership's future is causing smartphone delays, and an unclear gaming path for both, and giving the competition a big headstart.
If Sony and Ericsson part ways, it could streamline operations for Sony, allowing it to resharpen its focus on integrating smartphone and tablet development to once again be an industry leader.
Sony's president said recent hacking attacks on its PlayStation Network were a learning experience, suggesting the company's efforts in dealing with the ongoing crises gave the company strength and management some valuable lessons.
Sony president Tim Schaaf, in a Wednesday interview with VentureBeat, said Sony is recovering from a hacking attack that took the 77 million PlayStation Network accounts down for a total of six weeks. The outage cost Sony an estimated $171 million, but Schaaff's surprising comments indicated the company has been "very pleasantly surprised" by the experience.
"We're in a place where we're really looking forward again to what's next, what's new and how we can keep growing the network," Schaaf said.
Hackers hit Sony several times this spring that put the company in an uncomfortable spotlight. In April, information from more than 100 million users' personal accounts was exposed during two separate attacks, and more than 23,000 credit card details were targeted. In May, Sony dealt with several other smaller attacks, preventing the company from re-opening its PlayStation Network to customers.
Schaaf said despite the losses, Sony learned not just about protecting its security, but building the company's life so it can cope with such attacks. The company may have found some consolation as hackers targeted a host of other companies and institutions, including Citigroup, the International Monetary Fund, the U.S. Senate, the CIA, PBS, defense contractor Lockheed Martin and more.
The experience certainly provided a crash course for the company, which bolstered firewalls on its systems, among other security measures. Sony finally brought its systems back online on July 6 after 11 weeks of being down as a result of the hacks.
In the interim, Sony also created the new post of chief information security officer, reshuffled its gaming unit management and bolstered security by adding firewalls and system monitoring software to its servers.
The electronics' giant still must contend with restoring customers' confidence, which was damaged because of the company's lagging response to the attack and its initial protective measures. As a result, Sony caught the ire of regulators and was called to appear at a U.S. Congressional hearing.
Now, the company is attempting to restore its battered reputation by offering customers free credit card monitoring services for one year as well as free games.
While the company may have recovered its equanimity and shored up its outdated systems with new security, there is no telling how long it will take for it to truly cover.
Canadian regulators are investigating the winning $4.5 billion bid for bankrupt telecom company Nortel, to determine if the loss of Nortel's 6,000 patents harms its economy.
Canadian Industry Minister Christian Paradis said the results of the auction are subject to the Investment Canada Act, which require the country to gauge whether any foreign investment or acquisition worth more than $312 million has a net benefit to the country.
It's unclear whether the investigation will lead anywhere. While the selling price surpasses the $312 million mark, Nortel didn't list the patent value in its books. In addition, it made less than $10 million each year from the portfolio.
"As a standard practice, the minister expects officials to look into significant transactions to determine how the act applies," a government spokesperson told The Toronto Star.
Even if the government does not proceed with an investigation, plenty of entities question the patent auction's benefit to the worldwide wireless industry. One of those, the American Antitrust Institute, asked the U.S. Department of Justice to look into the possibility Nortel's patents will be used to limit competition in the wireless industry.
The winning bid for Nortel's various patents came from big companies, including U.S. giants Apple and Microsoft, Japan's Sony, Sweden's Ericsson and Canada's own Research in Motion. Opponents worry Apple, for example, may use its claim on Nortel's 4G patents to sue Google's Android 4G efforts, or that RIM, maker of the floundering BlackBerry series, may fight back to relevance by hobbling rivals with its claim on exclusive LTE rights, which it will share with Ericsson.
The tech industry is already rife with patent infringement suits, as companies battle in courtrooms to create revenue from settlements and licensing fees. Apple and Samsung are currently engaged in a legal war over design and patent issues, and Microsoft garners significant revenue from a patent settlement with HTC, giving the software giant a portion of profits from the sale of HTC's Android devices.
Nortel's patents may add fuel to the fire, especially for Google, who was left out of the spoils and is already vulnerable to suits on its Android platform.
If the patent sales are approved Monday as expected, it's quite possible companies may use their patents to threaten rivals and hinder competition in the wireless market. But they won't be able to do it without a few protests.
Sony plans to fully restore all PlayStation services in Japan, finally resuming service after a massive security breach hobbled the company and issued in a wave of hack in April.
The Tokyo-based company announced it will restore online purchases of game content and video-on-demand from the PlayStation Network and Qriocity music service in Japan on July 6.
The restoration marks the final step to full service after an 11-week shutdown of video game services after hackers stole data from nearly 100 million accounts, one of the largest data breaches to date.
After the initial attack, Sony contended with a barrage of hacks to its websites and information systems, including a series of smaller intrusions in May and hacks on its Greek, Canadian, Thai and Indonesian websites.
The wave of data intrusions -- and Sony's lagging response in informing and protecting customers -- caught regulators' eyes and prompted them to invite the company for an appearance at a U.S. Congressional hearing.
As a result of the hearing, Sony reshuffled its gaming unit management and bolstered security by increasing server firewalls and adding software to monitor system vulnerabilities and intrusions. In addition, Sony also created the new post of chief information security officer.
The company also attempted to shore up its battered reputation with its customers by offering customers a free year of credit card monitoring services as well as free games.
But with a 12 percent drop in its share price since the initial breach, Sony faces an uphill battle to restore consumer confidence and regain its bearings. The April attack ushered in a wave of cyber-attacks on other companies and institutions such as the International Monetary Fund, the CIA, the U.S. Senate, defense contractor Lockheed Martin, Citibank, NATO and others.
Sony and other companies must now tread more carefully against the increasing boldness of hackers and make cyber security a stronger priority. Sony's appointing an information security officer may be a solid step in this direction, especially since the company is likely on its guard for further attacks after its humiliating disaster this spring.
The hackers responsible for the original April breach are still at large, according to Sony. Hacktivist collective Anonymous initially claimed responsibility for a series of distributed denial-of-service, or DDoS, attacks that crippled Sony servers in April, but claimed it stole no data in subsequent breaches. Sony is working with authorities such as the FBI to identify the attackers, and the search for suspects continues.
A consortium of tech companies, including Apple, EMC, Ericsson, Microsoft, Research in Motion and Sony, outbid Google to win Nortel patents, in a move to protect themselves from copyright litigation and attack Android.
The group spent $4.5 billion, outbidding Google's initial $900 million offer, for the whole portfolio. RIM and Ericsson received the biggest slices of the patent pie, spending $770 and $340 million, respectively. Overall, the more than 6,000 patents deal mostly with wireless technology like 4G and Wi-Fi, search and social networking, among others.
"The size and dollar value for this transaction is unprecedented," said George Riedel, Nortel's chief strategy officer.
But the buyers are content too, as their hefty purchases could be insurance against massive legal fees in the future.
Tech companies today require a treasure trove of patents to fend off costly lawsuits revolving around copyright issues. Apple and Samsung are in a courtroom battle over intellectual property rights, each claiming the other stole its smartphone and tablet designs. The increasing tensions threaten to sour their business relationship -- Samsung supplies $7.8 billion of iPhone and iPad components to Apple.
Google, which expressed "disappointment" over the results, is perhaps lone loser of the auction. Its rivals now have an arsenal of patents to attack Android, and they may force Google, which has relatively fewer patents to defend itself with, to pay royalty fees on borrowed technology.
In fact, Android is a "suit magnet," with 45 pending cases against it for alleged copyright violations. Oracle recently levied a suit against Google for alleged patent infringement of Java.
The auction sales are pending approval from U.S. and Canadian courts for potential antitrust violations. The purchases should otherwise go through by the end of the summer.
Sony, Hitachi and Toshiba are in talks to combine their LCD production lines, in a partnership to fight South Korean and Taiwanese rivals and help them climb out of their collective economic hole.
The trio, which would become the largest manufacturer with 20 percent of the LCD market, is aiming to sign an agreement by mid-July and launch new products later this year.
The consolidation would strengthen the Japanese LCD industry as it comes up against vigorous competition from South Korean rivals like Samsung, as well as China's LCD production, which is expected to see sales increase by 20 percent this year.
While Hitachi, Sony and Toshiba have commandeered the LCD market for TVs and other large displays, they are banking on smaller LCD screens for tablets and smartphones to bring them much-needed cash.
Sharp, the world's largest small-scale LCD maker, switched production to small displays at one of its large-screen TV plants.
The Japanese trio may yet succeed in this venture too, as large LCDs for TVs continue to sharply drop. LG lost $229 million in the first quarter, partly owing to dismal flat-screen TV sales as people turn to laptops and tablets for entertainment.
But Sony, Hitachi and Toshiba will have to work hard before they are able to churn a decent profit from their joint venture. Sony especially has been languishing ever since its PlayStation network was hacked to pieces beginning with an initial major data breach in April.
The Tokyo-based manufacturer is facing a $174 million clean-up bill, not to mention legal fees and other expenses.
All three companies are also still reckoning with the aftereffects from Japan's March earthquake and tsunami, which destroyed several LCD plants. Sony lost eight factories and Hitachi one, while fellow LCD maker Panasonic also suffered damages.
Although for the most part plants are back up and running, the losses incurred this spring continue to haunt Japan's tech companies.
If they can successfully come together, Sony, Hitachi and Toshiba might be able to reverse their poor fortunes and compete effectively against rival LCD makers. However, given the deep hole all three are still mired in, it won't be easy.
Sony today announced its "Music Unlimited" cloud-based music service for Android, joining an already fiercely-competitive streaming music field.
The Tokyo-based company's subscription-based music service is available on all smartphones running Android 2.1 or later. The app is free to download from Google's marketplace, but users must pay a monthly fee to access the service's features.
Sony offers two different pay scales, $4 and $10 per month, including a one-month free trial.
Users who opt for the cheaper plan can expect an Internet radio service, much like Pandora, plus a scan-and-match feature similar to Apple's iTunes Match. The feature allows Sony to scan a person's music library -- including iTunes -- and then let him or her to listen to those songs on any Android handset without having to upload the songs to Sony's server.
The more expensive service, at $10 per month, offers both the radio and scan-and-stream, and also allows users to listen to songs they don't already own. Premium customers have access to the seven million songs in Sony's Qriocity library, including music from all four major record labels.
Users must stream songs to their smartphone or computer, rather than downloading.
Sony's jump from the PC and PlayStation 3 to the mobile field has already put pressure on other companies looking to make a push in the cloud. Both Amazon's Cloud Player and Google Music lack licensing rights from record companies and publishers. Without those rights, users must upload their music libraries to each company's cloud, a process which can take hours to complete depending on the collection.
Sony's Music Unlimited even one-ups cloud front-runner Apple's iCloudby allowing users to stream music they don't already own. ICloud users are restricted to only streaming songs they own, a huge disadvantage against the enormous selection offered on Sony's service.
Though Sony appears to be toe-and-toe with the iCloud service, it could falter because of pricing. ICloud users who have purchased most, if not all, of their music through iTunes don't have to pay a dime to stream any of their music. If a user wants to stream music not purchased through iTunes, he or she must pay a yearly fee of $25.
A Sony Music Unlimited user, by contrast, can spend between $48 and $120 per year to access the service. There are more songs and content for users to access, but Sony could be in trouble if consumers choose a cloud music service with their wallets and not their ears. Apple's service maxes out at $25 per year.
Sony may also have to contend with the high-profile data breaches that rocked the company for much of this spring. Consumer confidence may be shaken in the company, and potential users may wait and see until the company has truly shored up its security.
The race to the cloud is in full swing and Sony has brought its A-game. Its entry into the the mobile music offering will no doubt put pressure on its competitors to step up their games as well.
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