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When Sony called DSi a kid compared to PSP, it became somewhat certain that they are not looking the DS family as its competition. In fact, according to the latest rumor they are eyeing Apple’s iPhone which has gained respect because of its gaming capabilities.

Pocketgamer’s source tells them that the next PSP will maintain a slider form factor (which we’ve heard in the past couple of months) and will feature a large touchscreen and gaming keys along with dual analogue controls hidden beneath it.

The source also told that the handheld will make its way before Christmas to enjoy holiday sales and will have no UMD drive, which means all the games will have to be downloaded via the PSN store.

[Pocketgamer via PSPhacks]