Engadget is reporting today that Sony Ericsson is currently working on a "PSP Phone," one that will run on Android 3.0 and create a whole new "gaming ecosystem."

The report cites "trusted sources" who describe the device as a "cross between the Samsung Captivate and the PSP Go."

Sony's phone will have a PSP Go-style slideout instead of a QWERTY keypad, and a 1 GHz Snapdragon processor and a 5MP camera.

Running Android 3.0 (Gingerbread), the Android Market would be given a whole new section for games, ported from the PSX or PSP's vast libraries. The games can then be brought to other Android phones, as long as minimum specifications are met.

While this is not the first time we have heard a rumor about a PSP phone, this one seems to have the most legs and we will certainly keep you updated.

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Apple has said today it will begin replacing any iPod Nano that overheats in Japan, improving on their past offer of replacing only the batteries of said devices.

Japan's trade ministry had ordered Apple to "publish an easy to understand statement" on how owners of faulty devices could receive their replacement batteries.

The first generation Nano models, those sold between 2005 and 2006, are the ones in question, accounting for over 60 incidents of overheating leading to four cases of minor burns.

Apple has blamed the "very rare" occurrences on a single battery supplier.

Says Apple: "We've worked closely with METI (trade ministry) to make sure first-generation iPod nano customers who are concerned with their battery have the latest information."

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After being shown off first at CES and given an April release date, Plastic Logic delayed their e-reader in March and then again in June frustrating would-be owners who pre-ordered as early as February.

In late June, the company cancelled all pre-orders, making it very clear that the company was in trouble.

Today, Plastic Logic has announced that they are completely canceling all plans for the Que, due to increased competition from Apple, Barnes & Noble and Amazon.

"This was a hard decision, but is the best one for our company, our investors and our customers," said Plastic Logic CEO Richard Archuleta of the decision.

"We recognize the market has dramatically changed, and with the product delays we have experienced, it no longer makes sense for us to move forward with our first generation electronic reading product."

Differentiating the QUE from other e-reader was the fact it was aimed at the businessman demographic. The device would have retailed for $650 for the 4GB/Wi-Fi model and $800 for the 8GB/Wi-Fi/3G version. The Que featured a large 10.7-inch screen, and had built-in support for Microsoft Office documents as well as PDFs.

Over the months, while Plastic Logic kept delaying their product, Apple sold 3.3 million iPad tablets, and Amazon slashed the price of their popular Kindle device to $189, while releasing a Wi-Fi only Kindle for $139.

A first-gen e-reader from a nobody brand for $650 or a second-gen e-reader from one of the top e-tailers in the world for $139. You made the right decision here, Mr. Archuleta.

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According to sources talking to the NYTimes, Amazon is still actively considering getting into the media player and smartphone markets, moving away from just selling the Kindle e-reader on the hardware side.

The sources say Amazon wants to make it easier for consumers to purchase content from Amazon MP3 and Amazon Video on Demand, just like how Apple has iTunes and the App Store built-in to all their "i" devices.

Amazon's internal hardware division, known as "Lab 126," has put out a few versions of the very popular Kindle e-reader but has done little else.

While the company has explored getting into the smartphone market, one source does say that project is out of the "company's reach," at this point.

Says the Times: "Internally, Amazon executives have been frustrated with other companies aggressively entering the digital content business, and one person with direct knowledge of the company's plans said executives there were prepared to do whatever it takes to ensure Amazon remained a major player in the sale of digital content."

The giant e-tailer is currently looking to expand Lab 126 by hiring new employees.

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Microsoft, during their latest Patch Tuesday, has plugged 34 security holes while updating 14 security bulletins.

Four of the most critical bulletins were rated "highest priority" for enterprises.

14 bulletins is the highest amount of security bulletins ever released by the software giant during a Patch Tuesday, and a full eight were rated critical.

The four aforementioned "highest priority" bulletins are (via EW): MS10-052, which resolves a vulnerability in Microsoft's MPEG Layer-3 audio codecs; MS10-055, which addresses a vulnerability in the Cinepak Codec used by Windows Media Player to support the AVI audiovisual format; MS10-056, which deals with four vulnerabilities in Microsoft Office; and MS10-060, which resolves two vulnerabilities in Microsoft .NET Framework and Microsoft Silverlight.

Joshua Talbot, a security intelligence manager of Symantec Security Response pinpointed one of the none critical bulletins as being potentially very dangerous as well. That bulletin is MS10-054: "The SMB [protocol] pool overflow vulnerability [covered in MS10-054] should be a real concern for enterprises. Not only does it give an attacker system-level access to a compromised SMB server, but the vulnerability occurs before authentication is required from computers contacting the server. This means any system allowing remote access and not protected by a firewall is at risk.

"Best practices dictate that file or print sharing services, such as SMB servers, should not be open to the Internet. But such services are often unprotected from neighboring systems on local networks. So, a cyber-criminal could use a multistaged attack to exploit this vulnerability … [and] this issue affects more than just file servers using the SMB service. Workstations that have enabled file and print sharing are also at risk."

All of the other bulletins were rated "Important."

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According to research firm iSuppli, the DRAM market could see a significant supply shortage in the Q3 2010 due to "limited manufacturing equipment availability" and other challenges.

Says the company (via Barrons):

"A commodity profoundly susceptible to the variable dynamics of supply and demand, DRAM is expected to ship 15.9 million 1Gbit-equivalent units in 2010, up 48.6% from 10.7 million units last year."

"Most of the year's growth is forecasted to occur in the second half of the year, with each of the final two quarters of 2010 expected to post sequential bit growth of approximately 11%. In comparison, bit growth in the first two quarters of 2010 topped out at far below the 10% mark. Such high levels of growth, concentrated in a six-month period, will strain the production capabilities of DRAM suppliers."

Mike Howard, senior analyst for DRAM at iSuppli also adds that two major factors should lead the market into a supply shortage, with the first being limited tooling equipment, especially from ASML Holding. The second is the challenges for manufacturers migrating to below 50 nm.

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