hmm... Id have to disagree there Sky Render...Differentiation doesn't get you sales

1) Games will get you sales
2) Cheap Products will get you sales
3) Bigger/Wider Market will get you sales

Perfect example is DS vs PSP and Wii vs PS3
DS/Wii are cheaper, and their market is bigger (Casual)
PSP/PS3 are expensive, and their market is smaller (Hardcore)

Sony never goes for route #2 or #3 (Cheaper, Bigger Market)

Sony always goes for the Expensive/Hardcore (Technology wise) Market
Nintendo always goes for the Cheaper/Casual Market route

and how can you say if the PSP tried to 1up the DS, it wont help? How do you even know what they would do to 1up? What if they 1up and were better?

As you can see, trends change, when your on top you can easily lose the spot. So just because Nintendo is winning the handheld competition, doesn't mean it will stay that way no matter what for the next generation, as you can see with what happened to the PS3

But back on topic

I personally, would love to see more features in a PSP. I like what Sony did with the PSP and the PS3, features features features.

Id love to see a little hard drive in there, the ability to play movies (maybe MiniBluRay or something), there are many people out there who have always wanted their PSP to be a phone, I think thatd be a neat idea as well

Anyway, we're still 3~ years away from a new PSP, and by then im sure there will be some crazy stuff going on technology wise

There are a lot of components involved, it's true, but one of the most important catalysts for all other components is differentiation. A product which sets itself apart from its competitors can also draw in other demographics than the competitors do. More demographics means a larger user base. A larger user base means more games made. More games means more hardware sales, fueling refinement of that hardware and reduction of price for making it.

Products which do not differentiate themselves do not have a significant impact on their competitors. Though this can be combatted with secondary measures (such as having a larger distribution base than your competitors and aggressively marketing to get an early lead), it ultimately becomes a battle of attrition. The product which came first maintains its market stronghold by virtue of inertia, while the undifferentiated product fails to make a noteworthy dent. This applies to software as well, and is a big part of why no MMORPG which uses the World of WarCraft model has triumphed over World of WarCraft in terms of subscription base.

As for if Sony would risk innovation, they're not in a position where they'd be willing to. Large companies fear loss of resources more than small companies, and a failed attempt at disruption can sink a company. They will all but universally opt to take the safe route of improving what's already there over attempting to establish a new market and temporarily (if successful) or permanently (if not successful) alienating their existing demographic in the process.

Why do they need saving ? I dont get it ...

Anyways ... IMO the new PSP will have better PMP features and tons of Japanese exclusive games . Also , I see Sony making a couple of development teams whom will work only for the new portable sistem . Oh , and the PSN will be much more evolved untill then , and the video and game download center will probbaly kick ass :D

Point taken, and completly agree there Sky Render. Though about Sony not taking risks I would slightly have to disagree on, Sony is known for taking risks, which is what puts them where they are now. Who would have thought Sony would be come into the Gaming indrustry with the Playstation and do so incredibly well? They took a risk with BluRay, with the Playstation brand, with Walkman, with entering the Cellphone Industry, and they have pretty much succeeded in a majority of it (Excluding BetaMax and a few others)

But I must say, Im very impressed you didn't really take offense to what I said or react defensivly like so many people here do. Much respect there, good to see an adult around here not exploding agressivly when someone dares to quote them!

Good reply and really good points you stated. I'll admit I do look at the whole differentiation aspect different now, in a good way... So thanks for explaining yourself a little better there :)

 Sony Ericson's market share is sitll increasing, and the iPhone wont sell in Japan at all. Also, many still think the iphone is too expensive, and ericson phones are still selling well

Sony Ericsson is doing really well compared to its competition...

2004: 42 million units
2005: 50 million units
2006: 74 million units
2007: 101.3 million units

Since 2006, Sony Ericsson is the 4th largest mobile phone manufacture in the world...

Their latest cool phone, The XPERIA is absolutly amazing and many believe it will put the iPhone to shame...but thats just speculation

http://www.sonyericsson.com/cws/products/mobilephones/specifications/x1?cc=gb%2Cus&lc=en%2Cen

http://www.sonyericsson.com/x1/

Anyway, just some info for people that are curious

Sony refused to embrace MP3, insisting on using their own ATRAC codecs, this is what killed their walkman brand. Some of their early players were very attractive and resonably priced but when people reailsed they had to re-encode or re buy their exisitng MP3s they lost interest. Apple came along and made something trendy to morons with too much cash, which there seems to be a hell of a lot of. It was never the best MP3 player on the market and still isn't.

Regardless of that, how sony market the next psp is anyone's guess, the psp has failed to excel in any area so they have nothing to build on. The DS has found its niche, one that will probably guarantee Nintendo success for generations of future hardware. I dont think Sony can just clone the DS and stick a better CPU in, everyone should know that even if its technically better than the DS, the next DS will probably have some new 'gimmick', as well as playing all your old DS games and new DS2 games.
I don't think they have a hope to be honest. I own a PSP and while I have played a fair few games on it, I doubt I would buy a PSP2, if some of their current userbase aren't even interested in a new machine, what chance do they have of expanding thier market?

I think one area they have a chance to grow would be mobile phone gaming, a standardised and decent gaming service on all sony mobiles could be a double wammy for them. As Apple themselves are proving, people are willing to pay silly money for (under specced) phones, at a similar price with incredible gaming capabilities could be their best option.

 sorry fishyjoe but saying that iphone takes marketshare from sony ericsson walkmans is next to stupid.just to inform you sony ericsson has sold more than 60 million walkman phones and the continue to sell very well.people that buy walkman phones are not intrested in iphone,i wont go on explaining why because we will end having a mobile conversation and not a game conversation.

as for the psp2( i dont think it will be called like this) i think that sony will rely heavily on online capabilities and multiplayer,they will improve everything else from the original psp( battery life,screen,controls,engine,graphics,better ps3 connection ) and will ditch umd for flash storage.

first of all there will be definitely psp 3000 and after that sony will anounce psp 2. i think that it will have:
build-in camera
build in microphone
build-in gps
build-in internet browser
build-in keyboard
build-in phone capabilities
touch screen(but not dual screen)
online store acessible by psp
psx and ps2 emulation
backward capability
motion sensor just like sixasix
longer battery life
faster umd player and dual layer umd discs
some small hdd(maybe 5-10gb)

higher specs(probably one 1.5-2ghz processor, 128-256mb ram and at least 64mb graphic card)

For PSP2 what SONY needs is

- longer battery life
- 2nd Analog stick
- Improved Analog sticks ( the one on PSP needs some improvments ... )
- PS store access via PSP ... instead of needing a PC / PS3 ...
- New method for running games. eg. UMD2 or Flash Memory ( like DS...)

- More powerful hardware ( but not buy alot ... mybe Wii level )
- OLED screen ! ( its energy efficient and thin )

- CHEAPER launch price. $249 is too much to ask for a handheld. $199 is also pushing it -- $179 is the price SONY needs to aim for.

$179 for the core system ( PSP2, Charger, Manual, Memory Stick(128mb?)
$249 for the ultimate edition ( special PSP2, Charger, Manual, Memory Stick(128mb?), launch game x)**

**Note the $249 version would be a limited edition, and would be designed to encourage people to buy PSP2 at launch ... by special PSP2 it means a limited design/ colours ... possibly a number ( like number 5,687 out of 500,000)...