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Wednesday, October 04, 2006

Sony: The Kid Who Couldn’t Shoot Straight

By William Trent, CFA of Stock Market Beat

Engadget Reports: Sony (SNE) Portable Reader delayed (again) due to “overwhelming demand”
As we reported last week, the six-inch PRS-500 was set to hit stores “on or before” October 31st, yet the device’s page on SonyStyle now claims that “due to overwhelming demand, new Sony Portable Reader orders will ship mid November.” Translation: “You’ll be lucky if you get yours in time for the holidays, even though we’ve had ten months to gauge demand and manufacture enough Readers for everyone.”

This isn’t an, “oh, we messed up a little and couldn’t meet demand” delay, a la Starbucks. This is a product announced months ago that should have been adequately prepared for.Worse yet, this is another in a long series of Sony mishaps this year. Our biggest concern is that they will cede the gaming market to Microsoft and Nintendo with their efforts to pull another Betamax fiasco.

But on top of the battery recalls and the Portable Reader delay (not to mention losing the portable music market to Apple - oops we mentioned it) and we start to wonder if it isn’t Microsoft we should be worried about.

Unfortunately, it doesn’t look like the stock is down enough to make us think these mishaps are “priced in.”

The author may hold a position in the securities discussed. A current list of the author's holdings is available here.

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