Reliable sources told a sources's brother's girlfriend's roommate's dog's owner's manicurist's magician that Sony may be working on an iPod Nano contender. While the body would be a modified design of the NW-A3000 series, new units would actually run smaller than the Nano and playback video for 8-10 hours at a time on a larger screen. Sizes range from 2-8GB with pricing potentially starting a bit higher than the Nano's. Plans are for the the interface to stay the same.
But none of it will matter for Sony unless they start heavily advertising their Walkman products and stop letting cryptologists brand product models. The iPod line has earned its street cred through a superb product line, but I'm guessing that many consumers don't think twice because the Sansas of the world aren't even on their radar.
New Sony Nano-ish DAP [atraclife]