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August 09, 2006

The success of Sony's mylo: A Gordian knot

Sony recently announced the imminent release of mylo, a $350 personal communicator that supports WiFi, Skype, instant messaging and MP3s. This device is unique in many respects, but it may doom itself by being a little ahead of its time.

mylo is the killer app of VoIP and WiFi -- the first device that truly unifies voice and data communication. Earlier devices have taken a shot at this goal, but have been stunted by the antics of slow-moving telecom carriers, who want to preserve the status quo. The mylo is different from a PDA because of its much improved communications capabilities. mylo has a full QWERTY keyboard, which differentiates it from Sony's PSP game console. Together with Google's much-touted WiFi service and VoIP-enabled applications such as Google Talk, it may well be the Mobile Skype Cable that challenges the stranglehold of traditional wireless telecom providers on the airwaves.

Although the prospect of a WiFi-enabled personal mobile communicator sounds great, Sony has bet the success of mylo upon WiFi, whose own success has yet to be proven. Freely available WiFi is far from being universal. The lack of ubiquitous free WiFi outside public access areas like college campuses would stunt mylo's voice and IM communication features. Think of all the stories about abysmal cellular phone network coverage you've heard and magnify them a few times to get an idea of the situation. Until ubiquitous WiFi becomes a reality, mylo would be reduced to an expensive MP3 player.

This device is different from Sony's previous forays into personal electronics. It's almost as if the Vaio and PSP teams produced this device after a night of passion. The closest device that comes to mind is Sharp's Sidekick, marketed heavily by wireless carrier T-Mobile. The Sidekick too has a QWERTY keyboard and IM integration.It has a 2.6-inch screen form factor as against mylo's 2.4 inches. It may not support Skype but it has a camera instead. Nonetheless, mylo would beat the Sidekick for the average consumer because it is not tied to a carrier.

Sony's announcement raises a number of questions. Will mylo influence the PSP product line at all? Why is Sony entering the market of general-purpose personal electronics? It may be trying to differentiate itself from Nintendo, its closest competitor in personal electronic devices. Or perhaps it may be positioning itself to capture the detritus left behind by the peaking of the iPod--folks for whom a glorified hard drive with a video screen just doesn't cut it anymore.

If Sony's track record alone were any indication, it can sabotage the success of mylo in many ways. It can exercise proprietary control over technical aspects of the device and stunt its blossoming as a platform. It can try and pull off something as dastardly as the rootkit fiasco from last year. Or it can overprice a device that without WiFi would be a fancy MP3 player. Unless price cuts come soon for this device, lukewarm sales early on can cast a shadow over its future success, just as in the case of N-Gage. The big Internet companies, Google, Yahoo and Ebay, stand to profit considerably from usage of their mobile services on this device. Perhaps they can come to Sony's aid somehow and cut the Gordian knot that will make a seriously cool device like the mylo a success.

Posted by Vishy at August 9, 2006 07:33 PM

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