Will Parts Shortage Hurt Sony's PDA?

Posted By: Ed Thursday, July 27, 2000 6:57:33 AM

Yesterday, Sony cut its operating profit forecast for the year by a full 10% because of a world-wide shortage in electronic parts. Demand for cell phones and other electronic gadgets has out-paced the world's supply of LCDs and flash-memory chips. This shortage might have an effect on Sony's ability to produce enough of its new Palm-powered PEOs, the PEG-S500C and the PEG-S300.

Sony isn't alone. Palm has also been hit by the shortages, as we noted back in May, and the shortfalls are expected to continue for the rest of the year.

On the other hand, Handspring and TRG are reporting no problems meeting their demand and, in fact, TRG has in large type on their Web site, "TRGpro's & accessories are in stock and shipping the same business day!"

There is no way to know at this point what effect this might have on availability of the Sony PDA devices in Japan when they are to be released later this Summer or in the U.S. market when they come available late this year.

Component producers are already working at capacity and the shortage is expected to lessen only as new production facilities come on line. AMD president Hector Ruiz predicted said recently that the situation will continue for the next 18 months. AMD manufactures flash memory chips which are used in cell phones, PDAs, digital cameras and PCs. AMD is sold out of flash for the rest of 2000. "It's a crazy market," Ruiz said.

Thanks to C|net.

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sounds like a scam...

Gatsby @ 7/27/2000 9:06:25 AM #
I'm sorry, but a shortage of MANUFACTURED PARTS?!?

I had the same reaction with the whole "RAM shortage" several months ago. The market is becomming too consumer friendly for some and prices continue to drop. Next thing you know, "Oh, we can't lower prices because of the current shortage", or, "Because of the shortage we'll have to raise some prices."

This happens in every indusry and with nearly any big-ticket product. Are computer companies just not making *enough* profit at this point?

Not a Conspiracy Theorist Myself
Ed @ 7/28/2000 9:01:07 AM #
I'm sorry, I don't buy the theory that all the manufacturers of LCDs and Flash memory have gotten together to cut supply and raise prices. While I believe they might be able to fool the public I don't think they can fool the big companies like Palm, Compaq or Sony who are the ones buying these parts.

Furthermore, I don't think the PDA manufactures are in on the deal because they are losing sales and big money. Palm no longer has the best-selling PDA because they can't ship enough Vx's to meet demand. And Compaq's iPaq, despite being the best Pocket PC device yet, is about to fail because they can't ship any of the darn things. As this article points out, Sony lost nearly a billion dollars this quarter partially because they can't meet demand for their products and these losses are expected to continue.

No, what's really going on is a HUGE amount of Internet-capable cell phone are being made which ties up all the production capacity for LCDs and flash memory. This is happening despite the fact that it hasn't been conclusively shown that people want to access the Internet through their cell-phone. But that's another topic.

IT WON'T

dho @ 7/29/2000 9:52:15 AM #
No it won't. They will be on the
Japanese market in September
as schedeled.
Re: IT WON'T
Ed @ 7/29/2000 12:17:24 PM #
I think you are right but will Sony have enough units to meet demand? That's the question. There is a big difference between being on the market and actually having any units available for sale. I think Sony's PEG series will be back-ordered in Japan for a while and in the U.S. they will be in equally short supply until the Christmas season is over. Though you might be able to get the B&W version.
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