Nintendo says they aren't competing with everyone else because they're on the path of disruption.
Sony says it's not competing when it's convenient for them. Phil Harrison made those comments because he was underestimating the DS and thought the PSP would trounce it handily.
Another tidbit of Phil's: "with the DS, it's fair to say that Nintendo stepped out of the technical race and went for a feature differentiation with the touch screen, but I fear that it won't have a lasting impact beyond that of a gimmick - so the long-lasting appeal of the platform is at peril as a direct result of that."
Of course, as Nintendo and the DS decisively handed Sony and the PSP their collective asses, they're in different markets. It's the same thing with Wii vs. PS360.
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