Is Sony Out of Touch?

By Chris Crotty – Director, Small & Medium Displays Research, DisplaySearch

Despite the low turnout at SID last week, there was still a lot of interest in touch technology. Many companies showed off their latest touch products, and there were even two new touch-related companies present: Pacinian and Vissumo. And as a cap to a touch-filled week, Palm launched its long-awaited Pre smart phone. Once upon a time, in an iPhone-less market a long, long time ago, Palm actually planted the seeds of the current touch-enabled smartphone revolution with its then ground-breaking PDA products.

But in another city at another conference, touch technology was oddly missing from one company’s key announcement. The city was Los Angeles, the conference was E3, and the company was Sony, which debuted its new PSPgo portable game player. While the PSPgo sports many exciting features, it has one glaring flaw: no touch input. The omission seems particularly risky when key rival gaming products-including the Nintendo DS, Apple iPod touch, Apple iPhone 3G, and now Plam Pre-all include touch displays. At a time when more portable electronics products and gaming software utilize touch input, one has to ask if Sony is out of touch with the PSPgo. DisplaySearch’s new Touch Panel Market Analysis, for example, forecasts that the number of touch-enabled handheld game devices, portable media players and mobile phones will soar to 82 million, 64 million and 897 million units, respectively, by 2015.

Figure: Sony PSPgo

Source: Sony

Critics are also suggesting that Sony’s pricing is out of touch. When it launches on October 1, the PSPgo will retail for $250, currently $80 more than the touch-enabled Nintendo DS, whose lower display includes a resistive touch panel. Palm’s Pre sells for just $200. The iPod touch sells for as little as $229, while an entry level iPhone 3G will soon be available for just $99 given Apple’s recent announcement at its developer conference. To be fair in comparison, the Pre and iPhone prices require mobile phone servicer contracts. On the upside, consumers with Apple products and now the Pre have access to app stores where they can download thousands of games and other software.

Apple in particular has emerged as a key competitor for portable gaming. The company’s iTunes-driven app store features over 25,000 titles, with about 25% of those titles being games. Many of those games, however, fall into the “casual gaming” category and fall short of more sophisticated offerings available on dedicated game devices like the Nintendo DS and Sony PSP. Those devices currently have an advantage in processing power available for gaming software. That lead, however, will diminish with Apple’s new iPhone 3G, which features a faster processor than its predecessor.

Battling over portable gaming would not be the first time Apple and Sony have clashed in the portable electronics market. Apple beat out Sony for dominance of the digital music market. At the time, Sony made a critical mistake by embracing its proprietary ATRAC format instead of the popular MP3 format. Sony had a similar problem with the ill-fated UMD format used in the original PSP. With the PSPgo, Sony may once again be out of touch with the market.