Sony takes fight to Apple with launch of Android tablets

 @ibtimes
on April 26 2011 6:48 AM

Sony launched its first tablet computers in an ambitious attempt to grab the No 2 spot in a market dominated by Apple's iPad and set to quadruple in four years.

The gadgets, based on Google's Android 3.0 operating system, could be one of the Japanese company's most important product launches since the Playstation game console made its debut in 1994.

Sony, also the inventor of the Walkman, is struggling to come up with hit products and improve profit margins as it competes with Apple, Samsung Electronics and Nintendo.

Expectations are low that any company can present a credible challenge to Apple, said Jay Defibaugh, director of equity research at MF Global in Tokyo.

Sony strikes me as having a legitimate chance of combining its proprietary content and network services with an interesting form factor to attain its self-proclaimed target of being No.2 in this market.

Samsung's Galaxy Tab is Apple's strongest competitor while Motorola, LG Electronics and HTC are flooding the market with tablets running Android.

Sony's black, glossy devices, code-named S1 and S2, will be the first tablets to enable the use of PlayStation games, Kunimasa Suzuki, deputy president of the consumer products and services group, said at Tuesday's media launch.

Sony is banking on the unusual, off-center design of the S1 and access to first generation PlayStation games and its other networked content, to differentiate the products from the flood of tablets in the market.

Sales of tablet devices are expected to quadruple to about 294 million units between 2011 and 2015, with almost half that Android-based, research firm Gartner has forecast.

Sony gave no clues on the price of the new tablets, which will need to compete with the iPad2, offered at $499 and upwards depending on the model.

It has to be the same price as the iPad or less, said analyst Shiro Mikoshiba of Nomura Securities. They are in the position of having to catch up with Apple, so they have to be attractive in terms of price.

Still, price alone may not be enough. Research in Motion, which has priced the PlayBook to match the iPad, has struggled to win consumer fans since launching the device last week.

Sony's tablets will be WiFi and 3G/4G compatible. S1 has a 9.4-inch display and a curved design that Sony said makes it easier to hold for long periods of time.

The S2 has two 5.5-inch displays in a clamshell design, which Suzuki emphasized by producing one of them from his jacket pocket during the launch.

Sony, once a symbol of Japan's high-tech might, has seen its share price slide in the past decade as it struggled to keep up with rivals. Helped by its success in TVs and other products, Samsung's market capitalization of some $134 billion dwarfs Sony's $30 billion market value.

Sony's Kazuo Hirai, seen as a likely successor to CEO Howard Stringer, made his first public appearance at the event after the company promoted the gaming division chief to the number 2 position last month. [ID:nTOE729035] Google's Android chief Andy Rubin was also on hand to show support.

The company, which had been criticized for failing to come up with a tablet offering after iPad's launch in April 2010, has emphasized the need to differentiate its tablet from rivals, even if that takes time.

Although it's a late comer in the market, it has potential as what you need is just one big uniqueness that can sell to customers be it design or whatever, said Lee Sun-tae, an analyst at Meritz Securities in Seoul.

By the same token it could become just another of the Android gadgets flooding the market amid intensifying competition.

Hewlett-Packard Co unveiled its entrant in the tablet race in February.

Shares in Sony, which unveils its quarterly results on May 26, fell 2.1 percent on Tuesday in a Nikkei market down just over 1 percent.

(Additional writing by Anshuman Daga; Additional reporting by Miyoung Kim in Seoul)

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