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The battle for dominance in the portable music market increased in volume on Thursday as Sony followed hard on the heels of Apple in unveiling new products to reinforce their position in the fast-growing market.

Sony on Thursday unveiled its new flagship portable audio player and outlined its strategy to compete with market leader Apple.

However, the presentation, in a trendy Tokyo live music club, had been upstaged by the overnight launch by Apple in the US of its iPod Nano, a pencil-thin version of the ubiquitous music player. Apple also unveiled its entry into the mobile phone world with the introduction of a Motorola iTunes handset.

The nano features a colour display, capacity for 1,000 songs or 25,000 pictures, and a $249 price tag. A lower-powered version is also being issued.

Steve Jobs, Apple CEO, said the nano was one-third the size of rival palyers.

“They just changed the rules of the game completely. “Rival players are going to look big and clunky by comparison,” said Van Baker, analyst at Gartner.

Sony is marshalling its resources to compete more strongly with Apple, which still dominates not only the US, but Sony’s home market of Japan. It will allow its designers to move away from using purely Sony-developed technology as it bids to move out of Apple’s shadow.

Although Apple’s share of the Japanese market has slipped from its peak of 48.5 per cent in March, it was still number one with 39.4 per cent last month, according to a survey by BCN Research.

Sony, meanwhile has raised its share from 6 per cent at the beginning of the year to 16.5 per cent.

Last month, Apple launched iTunes in Japan, which attracted 1m downloads in its first four days and helped boost iPod sales.

The new Sony Walkmans, which range from a 20 gigabyte model using a hard disc drive to a 2GB model that uses a memory card, are meant to be easier to use than the models that Sony launched in the spring.

Sony aims to sell 4.5m units of the new players globally and claims it is neck-and-neck with Apple in the Japanese market for portable audio players that use memory cards.

Koichiro Tsujino, co-president of Sony Connect, said Sony was kicking off a new phase in its portable audio business with the start of the Connect division and the launch of the new models.

“We will pursue an open platform strategy,” he said. “So, we are completely reversing our strategy.”

Although Sony was the first to launch portable players that downloaded music from PCs, it fell behind in the portable audio market.

However, portable audio players are not as profitable as some of Sony’s earlier portable products and Mr Tsujino conceded that “the biggest challenge for Connect is how to create a value chain.”

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