The Sony Story>
Problems began in December, when Sony issued a limited recall of 60,000 dual-band phones because the radio-frequency
emissions exceeded FCC standards in some of the units, including the CM-B3200, CM-B3200PRC, CM-B2200PRC, and
CM-B1201SPR. The manufacturer had to break the news to carriers selling the phones and sent letters to all handset owners,
asking them to bring in their phones for RF emission testing and a software upgrade to adjust the power setting.
On top of that, the company was chronically unable to deliver products to market on schedule. The D-WAVE Zuma Z200,
which started shipping in April, was delayed a couple months beyond its intended release date, and the CM-ZS300, which the
company intended to release during Wireless '99 in early February, was never developed.
The ZS300 would have been the first to use Sony's new CDMA chip set and was intended to represent the next generation of
the Zuma family of phones. It was pulled after the company's upper management decided that the phone did not offer enough
advancement over current models to fully exploit the benefits of its new technology.
The company failed to deliver several other products on time. In February, Sony announced that it would release upgrades to
the Zuma Z100 and the Z200 in the first half of this year. These models were then put on hold for a planned release during PCS
'99 in September. The Astra CM-SB200 dual-band CDMA handset, announced in February for availability this summer, also
was put off for PCS '99. With last week's announcement, none of these phones will be produced.
But the key factors contributing to Sony's withdrawal from the business, from Modoff's perspective, were the company's
inability to continually redesign and reinvent new products, which he says is fundamental to success in this marketplace. Sony
was "slow in doing that," he said.
Although no longer a direct player, Sony is continuing its investment in Qualcomm Personal Electronics, a joint venture it has
operated with Qualcomm since 1994. QPE manufactured both Qualcomm and Sony branded phones. Sony has held a 49
percent share of that business, with Qualcomm holding 51 percent.
Qualcomm now will take advantage of the manufacturing capacity left by Sony to beef up its own production.
"That's where the majority of our handset manufacturing was taking place," said Christine Trimble, Qualcomm's spokeswoman.
"Our capacity now is about 650,000 to 700,000 phones a month, and we've been looking to expand that."
Sony said it has worked with about a dozen wireless carriers in the United States and will continue technical support up until the
end of September, including continuing to honor one-year warranties for consumers who have purchased their phones through
their carriers.
The company will continue to provide parts for handsets after warranties expire, however, at users' expense.
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