In a bid to capture the huge audience for handheld entertainment gadgets, Microsoft (Nasdaq: MSFT) is designing a product that combines games, music and video in one handheld device, according to sources familiar with the project. The Microsoft product would compete with Sony (NYSE: SNE) , Nintendo and Apple Computer (Nasdaq: AAPL) products, including the iPod. And Microsoft has some of its most seasoned talent from the division that created its popular Xbox 360 working on it.
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