CNET article, Forrester Research analyst James McQuivey explains Sony's lost opportunity to capture the media download market. Due to their fixation on UMD, Sony has let Apple hold a near-monopoly on digital downloads. "The thing is, Sony could have been all this. The Sony PSP is one of the best portable entertainment media devices that anyone has come up with in years. It has a relatively big screen, plays video beautifully, has good storage and audio. It could have been the first big mobile carrier for TV shows and movies."
Even now, Sony continues to stand by UMD, instead of offering a true video download service for the handheld. Sony seems content with their position: their attempts in Japan have been lackluster at best, and PSP's video playback remains crippled due to incomprehensible video restrictions. "You got a company here that's pushing its own approach on every level, and as a result nobody is using its memory stick or video format," McQuivey said. "So you don't have the same robust market that you could have had if you said, 'We're going to open this up. You can put your Windows Media files on here. You can put your QuickTime files on here.'"
All hope is not lost, however. A Hollywood executive spoke anonymously to CNET, noting that many Hollywood executives are "pulling for the PSP to emerge as a competitor to the iPod." Many executives are afraid that Apple will maintain a monopoly over movies as it has had over music. Competition is good for the consumer, and the companies making the content. A PSP video download service makes so much sense, but it won't happen until Sony stops making lame excuses. "But Sony has been so dysfunctional and clueless when it comes to the Internet," said the executive. "We keep hoping they pull themselves together ... with the PSP video, we're hoping they create a forward-thinking strategy and stick to it."