To put it simple Sony should try again to tackle the portable market, there is clearly enough space to make money on this segment as the PSP has Sold over 50 million units and Sony isnt losing money on the hardware, however they should kill the PSP 1st gen and Go, by a price reduction and announce a succesor, their focus when creating the device should be:
Portability, Conectivity, Backwards compatibliity to the content that's on PSN for PSP (PSP games/media/minis), Create Software that can be consumed on the Go,Security, allow developers/Creators in general to create apps for the device in order to increase funcionality, these apps can't be games and should Pass certification in order to mantain security and control over the platform and should cost from 99 cents to 10 dollars. This way all those software creations from the homebrew scene can be rewarded and remove the interest by this talented group to crack open the platform as you will be giving them legit access and rewards for their talents. The SDK for the Apps should be able to run on as many plaforms as posible PC/PSP SDK/PS3 SDK.
Get in contract agreements with the Telecomunications company in order to offer the system connected to their network.