• Financial Times, Tuesday, December 19, 2006 11 AM

Sony's bad year got worse earlier this week, as the public relations nightmare that was AllIWantforXmasisaPSP.com was officially taken down by the electronics giant, after several news outlets, including MediaPost, exposed the site as a flog, or a fake Web log.

But buried beneath the negative stories about Sony's marketing problems, was what could turn out to be a landmark decision for the electronics giant's portable media player, the PlayStation Portable. Widely regarded as a video game-only device, Sony is now opening up its Web-enabled handheld to the download video market. The PSP is a powerful little device that's well-equipped to play video (it already plays music files), but the question is if it can seriously compete with Apple's iPod.

The short-term answer is no. Sony's memory stick is able to hold up to 4G of memory, compared to the iPod's 30 or 60. It remains to be seen whether the electronics giant will come out with a memory stick capable of more storage. 4G is enough for about 10 movies. That said, users could easily transfer the files to another computer or external hard drive. Sony is now in talks with Amazon.com and film download site Movielink and CinemaNow. The new service is expected to launch in early '07; it won't, of course, be compatible with Apple's iTunes.

Read the whole story at Financial Times »