Sony's tablets may be a tough sell with price tag

NEW YORK/BERLIN Wed Aug 31, 2011 12:49pm EDT

Kazuo Hirai, President and Group CEO of Sony Computer Entertainment, presents the new Sony S tablet (R) and the P tablet during a news conference at the IFA consumer electronics fair in Berlin August 31, 2011. REUTERS/Tobias Schwarz

Kazuo Hirai, President and Group CEO of Sony Computer Entertainment, presents the new Sony S tablet (R) and the P tablet during a news conference at the IFA consumer electronics fair in Berlin August 31, 2011.

Credit: Reuters/Tobias Schwarz

NEW YORK/BERLIN (Reuters) - Sony Corp (6758.T) took the wraps off its long-awaited tablets on Wednesday with price tags that could hurt the company's chances to compete for the No. 2 spot in the tablet market.

Sony's basic model of its main tablet costs $499, the same as Apple's iPad.

The Japanese company is coming late to the game with its first tablet due to hit store shelves in September. Its release is more than a year and a half since Apple Inc (AAPL.O) released the iPad and almost a year since Samsung (005930.KS) came out with its first GalaxyTab (005930.KS).

Sony (SNE.N) had vowed in January that it would become the world's No. 2 tablet maker -- behind Apple -- by 2012, and is expected to stick by that bold claim on Wednesday at an event in Berlin to unveil the tablets, attended by Chief Executive Howard Stringer, who walked onstage to disco beat.

"We want to prove it's not who makes it first that counts but who makes it better," Stringer said.

Sony is trying to distinguish its Android tablets from others by having features that let one tablet function as a universal remote, while another one folds like a clamshell,

But at least one gadget reviewer who has played with the new "Sony Tablet: S" is not so sure it can compete with rivals with high-end tablets at the same price.

"I don't think it has the premium feel, design and build quality that either the iPad 2 or GalaxyTab has right now," said Tim Stevens, editor-in-chief of the Engadget tech blog.

"I honestly don't think this is going to be the tablet that really catapults Sony into the lead on the Android front, which is where it needs to be if it wants to be No. 2 in the tablet market," he added.

Sony's tablets run on Google's (GOOG.O) Android software, like the GalaxyTab and many other tablets from Acer Inc (2353.TW), Asustek (2357.TW) and Motorola (MMI.N).

There has been little buzz generated ahead of the release, unlike the anticipation for the iPad or even the GalaxyTab.

Sony hopes the tablet will restore its leading position in consumer electronics. Once a symbol of Japan's high-tech might, the Japanese electronics conglomerate is struggling under the weight of its money-losing TV division and badly needs the boost of a new hit product.

"Sony really must be in the tablet market and must succeed," said Mito Securities electronics analyst Keita Wakabayashi.

Worldwide tablet shipments are forecast to more than triple this year to 60 million units, and then rise to 275.3 million units by 2015, according to an report this month from research firm IHS iSuppli.

SONY TOUTS ERGONOMIC DESIGN

Sony said the S tablet is unique because of a universal remote inside the computer that can be used to control stereos, cable television boxes and TV sets of many brands.

The company also touted the curvy design of the S tablet, which resembles a folded- back magazine, to make it to easier hold with one hand.

The single-screen, wifi-only device has a 9.4 inch screen, weighs 1.33 lbs and has front and rear cameras.

A 16 gigabytes version of the tablet will cost $499 in the U.S., while the 32 GB version will retail for $599 -- the same prices as the iPad. In Europe, the S will cost 479 euros. It can be pre-ordered on Wednesday and will be in stores in September.

Sony's second tablet, the P, comes with 4 GB of memory and looks like a clutch purse. It has two 5.5-inch screens that can be folded together and weighs less than a pound.

The tablet also offers 4G cellular service. In Europe, the P will cost 599 euros and be out in November. Sony said it would be in stores in the U.S. later this year but did not provide a date. No U.S. price-tag has been set on it either since that is up to the tablet's exclusive carrier AT&T Inc (T.N), Sony said.

Sony joins a slew of tech companies hoping to win share in the tablet market dominated by the iPad, but few have succeeded. Hewlett Packard's (HPQ.N) decision to drop its Touchpad tablet weeks after launch demonstrates how easy it is to fail, though sales did soar after HP slashed prices to $99 from $399 and $499, prompting the company to announce a further "final run" of the tablets to meet demand.

Sony's tablets tap into its entertainment library by offering music and movies services, which should give it an edge on rivals, according to Stringer, the CEO.

"Apple makes an iPad, but does it make a movie?" Stringer said.

Shares of Sony fell 1.77 percent in Tokyo trading before the tablets were unveiled. U.S. listed shares rose 0.7 percent. (Additional reporting by Christoph Steitz in Berlin and Isabel Reynolds in Tokyo)