Maybe I'm crazy, but I think the same "jack of all trades" approach Sony used for PSP will cause problems for PS3 as well.
PSP benefits from the PlayStation heritage, it's uber-powerful compared to its competition, it does all kinds of neat media things, it's got a high-capacity storage format, it's sleek and sexy, and it's expensive.
Yet it's getting trounced in sales by Nintendo's DS.
OK, there's problems with the analogy - namely, PS3 is a home console and PSP is aimed at a different market and even a slightly diffent user - but this early in the morning, I find the parallels interesting.
And I still maintain that this round, MS has made X360 a more attractive alternative to PlayStation than Xbox ever was.