Everybody seems to forget the MP3 capable "musicphones".
If Sony can make the "Connect" service as good or better than iTunes (I hope, but doubt...) then these musicphones could be a serious competitor to iPods.
On other areas, I think Sony audio gear (nowadays, it seems to be just AV amps that are the main product line for any company) is just not up to competitors with current models, a few years ago they were still competitive, but recently the design, features and finish leave something to be desired compared to those from Pioneer, Denon, H/K, Onkyo...
On video gear, I think they're doing much better than audio. DVD players are well featured and good quality, the new Bravia TV line seems to be a deserved success and their front projectors are generally considered to be among the best.
The Blu-ray should only reinforce their position in video.
Sony movies and music, they seem to be doing ok.
Playstations.... don't see them having a trouble at all on that area. Ã think it's only common sense they'd be capitalising on their best known rand, and intervining their other businesses to it in many ways (cellphones having connectivity with PSP and PS3, 1080p displayst to take full advantage of PS3, LocationFree TV, Connect store...)
So, mainly it's their audio products that are having serious trouble from better competitors, although they shouldn't rest their laurels on displays either as the competition is fiercer than ever and there are very very interisting and lucrative techs on horizon from other manufacturers. Sony clearly isn't anymore the same "no.1 name in the list of choises" in TV's as they were in the 90's early 2000's.