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Sony's Plan to Terminate Apple Is Ridiculous

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The company is rolling up its sleeves 10 years too late.

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Tired of watching folks walk around with all those newfangled Apple (AAPL) doodads, Sony (SNE) is busy readying a new line of portable devices for battle.

According to a Wall Street Journal report, Sony is developing "a smartphone capable of downloading and playing videogames" and "a portable device that shares characteristics of netbooks, electronic-book readers, and handheld-game machines."

Wow, a PlayStation phone sounds like a great idea -- perhaps 10 years ago when Sony was on top in gaming. But it's 2010, and the PlayStation brand's dominance has been steadily eroded by Nintendo's and Microsoft's (MSFT) success with consoles and mobile devices.

The idea of a gaming-centric phone excited me in years past, but what's the point now? Mobile-game pricing is quickly headed toward zero. Sony's a major conglomerate -- it would need to sell hundreds of millions of cheap games to make a dent in the bottom line, somehow toppling Apple's hugely successful App Store along the way.

There's also a lack of room in the marketplace for another smartphone brand.

According to market-research firm IDC, the smartphone market grew 15% in 2009 -- not bad, but nearly half of that growth came from Apple alone. Apple's share of industry growth declined to 28% by the fourth quarter, but that's at least partially because of surging Android phone sales.

We already have the iPhone, Research In Motion's (RIMM) BlackBerry line, Palm (PALM), a growing fleet of Google (GOOG) Android-powered devices, and the new Windows Phone 7 platform from Microsoft -- there is literally too much good stuff to choose from. Verizon (VZ) keeps offering me two-for-one deals on some of the best phones on the market like the Motorola (MOT) Droid and Palm Pre.

As for the other mystery device -- who knows? Any tablet computer, including Apple's eagerly anticipated iPad, will face serious problems in generating big sales. Tablets look cool, but the reality is they don't do anything new. For the foreseeable future, tablets will be a niche category, and Sony won't be the company to break it into the mass market. Like all consumer-electronics conglomerates, Sony largely makes boring commodity products.

Both products are expected to tap into a media-distribution application currently named "Sony Online Service," which is where things simply get bizarre. Let's ignore the fact that companies like Apple, Netflix (NFLX), and Amazon (AMZN) are way, way ahead here. The Wall Street Journal report claims that Sony wants to leverage its portfolio of games for the original PlayStation. Original PlayStation.

Sony, do you really want me to buy a phone that's 10 years too late just so I can play 15-year-old games on the go?

For now, let's just hope those Wall Street Journal reporters had a little wax in their ears.
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No positions in stocks mentioned.
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