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Rafat Ali gives an update on the ever-evolving portable media players market:

The considerable and constant morphing of portable media players and mobile phones into swiss-army-knife devices is taking its toll on PDAs. Sony already had pulled back on the elegant but high-priced Clie in its overseas markets but now is halting development in Japan. Sony is trying to spin the move away from getting out of the PDA business; a spokesperson told IDG: It’s a chance for us to recharge our batteries, to sit down and consider the business.” But it’s hard not to see it as a big step back. Will Sony put PDA operations in its portable media players? Its already moving into MP3 phones.

Meanwhile, Apple acknowledges the competition by expanding iPod options and lowering some prices. For instance, the 4GB $249 iPod mini that didn’t compare so favorably price-wise to the 5GB $225-ish Creative Zen Micro is now a better deal at $199. Ditto for the new 6GB iPod for $249. The iPod Photo has better price points and more functionality. Apple isn’t going to be able to own the market forever but moves like this should help it rule a lot longer.

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