Sony Considering Music Downloads for PSP to Compete with iPhone?

CNet reports that Sony is talking with major recording companies about providing downloadable music for the PlayStation Portable gaming device.

The sources said the talks are only preliminary and no deals have been struck. But apparently, Sony is considering offering music on the PlayStation Network, the company's nascent multiplayer gaming and digital download service. Such a move could place the PSP in direct competition with other multiuse music players, most notably the iPhone.

While primarily a gaming device, the PSP has always offered multimedia capabilities such as movie and music playback. The device, however, has been hampered by rather closed standards such as the Universal Media Discs (UMDs) required for movies.

"If we had gone with open technology from the start, I think we probably would have beaten Apple," Stringer told Nikkei Electronics Asia recently. "Sony hasn't taken open technology very seriously in the past. Its Connect music download service was a failure. It was based on OpenMG, a proprietary digital rights management (DRM) technology. At the time, we thought we would make more money that way than with open technology, because we could manage the customers and their downloads.

If true, the move would increasingly align the PSP directly against Apple's iPod Touch and iPhone platforms. Apple's iPod touch and iPhone have become a surprise success in the mobile gaming market leading many industry observers to believe that both Nintendo and Sony are very concerned about the Apple's early success. Anecdotal reports peg the iPod Touch and iPhone demographics right up against the PSP's. This direct competition could explain this attempt by Sony to further expand the appeal of the PSP beyond gaming.