Up to now, Sony Electronics — the godfather of portable audio! — has been at best an “also-ran” in the portable MP3 market. Why? Not because of crappy hardware or high prices (though these help); no, it’s worse than that. Sony also includes Sony Entertainment, which makes records (sort of). Consequently, Sony Electronics wasn’t permitted to create a music player that just plain played unrestricted MP3 files; in order to pay your music on one of Sony’s devices, you had to convert it all to ATRAC3 or somesuch, and use their goofy software that tried to keep up with how often you downloaded your tunes to the device. Basically, they were trying to sell a device that was a real pain in the ass to use, but were competing against Apple’s iPod and the myriad of copycats who saw no problem with supporting plain old MP3 playback and transfer.

What’s really fucked up about this is that, if my understanding is correct, Sony Entertainment is seriously the tail wagging the dog here; Sony Electronics contributes way more to the bottom line, and yet still somehow ended up being the RIAA’s bitch.

But only up to now; Sony Electronics has finally admitted its players suck, and has released a firmware upgrade to allow them to play MP3. New players will have MP3 capability built in. Of course, given the strength of the iPod brand — it’s clearly the heir to the Walkman — it will be difficult for Sony to regain its position in the market; this little imbroglio almost certainly cost them millions.