Sony (NYSE:SNE) is taking one more step toward making its Walkman a more formidable contender in the digital music wars. According to several news agencies, Sony is launching a new Walkman with a hard drive and support of the popular MP3 format. However, when this product will be available in the U.S. is still unclear.

The product will be available in Japan and Britain before Christmas, although the rest of Europe will have to wait until after the new year. (An MP3-compatible Walkman with 1 GB of flash memory is already available in the U.S.)

The fact that Sony's finally coming around to the importance of MP3 compatibility isn't exactly news. In fact, I wrote about Sony's plans to support the MP3 standard back in September; previously, its players supported only its proprietary ATRAC format. Back then, word had it that Sony wouldn't launch this more appealing Walkman until early in 2005 -- I wondered at the time whether that would be too little, too late.

Obviously, Sony needs to jump fast, given the competitive landscape. Apple (NASDAQ:AAPL) has had quite a head start with its popular iPod, which recently took on photos and Bono. Meanwhile, there's plenty of other competition too, including Virgin, which recently launched an MP3 player that my Foolish colleague Seth Jayson theorized could threaten the iPod, given Virgin's hipster ways and appeal to younger folk.

Indeed, everyone from unfamiliar upstarts to Motley Fool Stock Advisor pick Dell Computer (NASDAQ:DELL) wants a piece of the digital music action. However, this holiday season should be interesting, given the iPod craze that appears to still be in full swing, while rivals aggressively attempt to play catch-up.

Sure, Sony is bettering its odds for rapid adoption with a new hard-drive-packing, MP3-playing Walkman that closely mirrors the iPod. However, given the imminent launch of this product in Britain and Japan and no word on whether it will be available in the U.S. before this year is done, one might wonder what Sony's waiting for -- or whether it already considers the U.S. to be official iPod territory this holiday season.

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Alyce Lomax does not own shares of any of the companies mentioned.