I remember Sony's first ereader. Picture a clamshell form factor. You can see it here:
Although, I am a bit confused. It claims to be from 1990, and I could swear that I first saw it about 1987.
Anyway, I think Sony's downfall began when they bought Columbia Music. They began to worry about their empire and not about the consumer/products. They worried about illegal copying of music, and copy-protection features crept into their products. They tried to lock up the total ecosystem, so we saw proprietary mini-disk formats, memory sticks and more.They bet the company on the PS3, it was a good machine, but late and expensive.
Right now, Apple has their position in the industry. Sony comes out with products after everyone else*. They need to start thinking about how they want to create new markets, not follow the phones, laptops, computers, game machines, cameras and TVs of everyone else. There is nothing wrong with the stuff they make, but they sell premium priced goods that are quite similar to the stuff of everyone else.
* I know they have been a pioneer in ebooks. However, I tie this to development in the 1980s leading to 1990's diskman. It's not really a recent innovation.