According to Dean Takahashi, author of The XBox 360 Uncloaked, half of the 360 hardware team is now working on a portable XBox along and that Transmeta has dedicated 30 engineers to do Redmond's bidding. No "real" information yet, but with all the fake mock-ups and Origami hype, we're not holding our breath. One interesting point made by The Inquirer:

It's widely known the Vole is none too happy about the huge success and market-share-grabbing device that is the Apple iPod. For Microsoft to release its own-brand music-player tied-down to its own DRM-infected music store would be unthinkable (albeit for the non-evil Apple this is completely fine), anti-trust lawyers the world-over would be rubbing their hands with glee, along with product manufacturers such as Creative, et al.

So the portable could be a secret Trojan horse media player that just occasionally plays games. Feasible, I suppose. After all, the PSP is a UMD playing media juggernaut now... oh, wait. – John Biggs

Microsoft working on a portable XBox [TheInquirer]

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