Apple couldn' t possibly compete, even in the handheld arena. There might be a bigger focus on games for the widescreen video iPod, but i wouldn' t expect anything more. I mean, i can' t believe Nokia are trying again with the NGage brand, it' d gonna get trashed. Again.
PSP is really coming into it' s own. It could do with a re-design, possibly making it smaller, but the game that are out now and coming soon are what everybody expected when Sony announced they were releasing a handheld. It' s a shame GT Mobile isn' t out yet though, i expected it to push the units technical limits and it was going to be the first game to use 333MHz rather than the capped 222MHz. With MGS Portable Ops, Tekken Dark Resurrection, Ridge Racer 2, Vice City Stories, a new Burnout on the way, Call of Duty and Medal of Honor etc... even DS with it' s AWESOME games looks much less appealing.
With proper Silent Hill and Final Fantasy games coming next year, and the standalone PSone download service in development then PSP is going to really take off. It' s sold well so far but it' s been a slower burn than i expected, probably because Sony can' t easily reduce the price as the units still cost them a lot to make.
If anybody else is going to enter the handheld gaming market it' ll be Microsoft.
The thing is, Apple could simply adapt the Mini Mac for gaming...
...and easily take on Sony and Microsoft but is it viable? No, and while they would do very well in the west, they, like Microsoft, would fail in Japan. You' d have Sony and Nintendo dominating in Japan, and Microsoft and Apple dominating in the western territories. It' d be awful.