Sony yesterday began its campaign to dominate the MP3 player market, with new product-strategy announcements.

Apple is clearly in the company's sights: "We are taking on iPod with our new device," a Sony executive said. "We are coming at Steve Jobs on that front".

The company detailed its plans for an all-in-one handheld gaming device (the PSP) incorporating a digital music and video player and mobile phone features. It's due to appear in late 2004.

Sony executive deputy president and head of games Ken Kutaragi said: "PSP will be the Walkman of the future."

Sony is moving aggressively to protect its position as the world's number one consumer electronics supplier: the PSP product will compete with Nintendo's Gameboy, Nokia's N-Gage and Apple's iPod.

The company showed Reuters a concept model of the two-handed device, which has a 4.5-inch colour screen. The product line will offer different devices in the same format, each with specific features.

The Sony executive credited Apple and its CEO Steve Jobs for the success of the iPod, but pointed out that PSP users would also be able to watch music videos with the device. The company also said it would ship an MP3 player next year that will cost just $60.