There seems to be little doubt that the oft-rumored Playstation Phone, a new smartphone from Sony Ericsson (NYSE: SNE, NASDAQ: ERIC) targeted at video game players, is a guaranteed release for 2011. Late last summer, tech blog Engadget ran a report detailing the new smartphone’s specifications, revealing that the device would sport a slide-out game control array rather than the slide-out QWERTY keyboard common to so many smartphone models. Later in October, Engadget ran another story about the Playstation Phone, this time including convincing images of a prototype version of the device. Up until now, though, Sony Ericsson and its parent companies have declined to comment on the existence of the phone or plans for the device in the coming year. Sony Ericsson Mobile Communications CEO Bert Nordberg broke that silence today.
Talking with the Wall Street Journal, Nordberg all but officially confirmed the phone’s existence. “There is a lot of smoke, and I tell you there must be a fire somewhere. Sony has an extremely strong offering in the gaming market, and that’s very interesting, ” Nordberg said, a coy response to questions regarding the existence of the Playstation Phone. The chief executive also discussed why Sony Ericsson hasn’t leveraged the Playstation brand to release a gaming phone in the past, something that Wall Street analysts have been pondering as mobile phone gaming has grown into a major business over the past decade. While Nordberg couldn’t say why it was that a Playstation Phone hasn’t materialized in the past five years despite numerous rumors confirming one’s existence, he did say that Sony Ericsson is looking to make a lot of “noise” by unveiling a new product at the upcoming Mobile Word Congress in Barcelona this winter. Come February, the world may get its first official look at the Playstation Phone.
According to other unnamed sources, though, the Wall Street Journal says that the device may not carry the Playstation brand after all. It was previously rumored that the phone would share both the Sony Computer Entertainment Playstation brand and the Sony Ericsson Xperia brand, though now it sounds as though the new gaming phone may only carry the Xperia name. The reason behind this is to protect the integrity of the Playstation brand, a potentially wise move on the part of Sony given rumors that the company will be launching a successor to the Playstation Portable, the PSP 2, next fall. Though concerns a Playstation Phone could cannibalize Playstation Portable 2 sales may not be the only factor at work.
The new Sony Ericsson gaming phone is also said to run on Google‘s (NASDAQ: GOOG) Android mobile operating system. Playstation products, both the PSP and Playstation 3 home console run on a proprietary operating system with a proprietary graphic interface called the XrossMediaBar, the features of which are tied heavily into branding for the company’s gaming products. Sony has spent millions in advertising over the past two years on print and television ads that incorporate the sound effects and layout of its operating system interface, so it’s doubtful that Sony would sacrifice its branding to use the Google Android operating system in a device that could potentially drive the brand over the next decade.
Investors should not factor the Playstation Phone (or Sony Ericsson Xperia Gaming Phone) into their interests in the smartphone market just yet. Sony Ericsson is currently building its stake in the Android phone market, a sector that Nordberg says the company is performing well in despite having only entered the race last spring with the release of the Xperia X line. More likely than a Playstation branded phone is a Sony Ericsson phone running Microsoft‘s (NASDAQ: MSFT) Windows Phone 7 operating system. Though Sony Ericsson France CEO Pierre Perron confirmed last week that the company has no Windows Phone 7 in development, it’s heavily rumored that the company will transition to Microsoft’s platform away from the Nokia (NYSE: NOK) backed Symbian operating system.
The Worldwide Quarterly Mobile Phone Tracker report from International Data Corp published last October found that Sony Ericsson had been bumped out of the top five mobile phone manufacturers in the world after Apple Inc. (NASDAQ: AAPL) passed Research in Motion (NASDAQ: RIMM) for the number four spot. If Sony Ericsson wants to climb back to the top, they need to find a new product to capture the market’s attention. Whether or not that product is the Playstation Phone remains to be seen.
As of this writing, Anthony Agnello did not own a position in any of the stocks named here.