"In a bid to capture the huge audience for handheld entertainment gadgets, Microsoft is designing a product that combines video games, music and video in one handheld device, according to sources familiar with the project," reports Dean Takahashi of The San Jose Mercury News.
Normally I wouldn't take that sort of thing too seriously, but Takahashi is a very good reporter and has excellent contacts with Microsoft through writing his book, The Xbox 360 Uncloaked: The Real Story Behind Microsoft's Next-Generation Video Game Console.
Microsoft has followed Sony's games console strategy pretty closely (as J Allard told me it would), and it is not unusual for console manufacturers to release handhelds too (Sega GameGear, Atari Lynx, Sony PlayStation Portable, Nintendo DS).
And it has one thing that makes it hugely appealing to Microsoft at the moment, which is the ability to do its own hardware, software, and online service. In the markets for mobile phones, notebook and desktop PCs etc, it is reliant on third parties for those, and they don't always do what Microsoft would like -- often the reverse.
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