Sony has unveiled its latest Playstation 3 at an event to coincide with the E3 gaming convention in Los Angeles.

Scheduled to ship in early 2006, the console uses IBM's new Cell processor running at 3.2GHz. Sony claims that this allows the Playstation 3 to outrun Microsoft's upcoming Xbox 360 by offering twice the computing power.

The device sports a slew of networking technologies, including Wi-Fi, Gigabit Ethernet and Bluetooth controllers. The Wi-Fi capability allows it to connect to Sony's Playstation Portable gaming computers.

Sony has already confirmed that the Playstation 3 will support the Blu-ray standard for next-generation DVD discs. It will also play DVD-R, DVD+R, DVD+RW and regular CDs. Games designed for Playstation 2 will work on the new console.

Sony's Playstation is the best selling gaming device in the world and one of the profit engines for the consumer electronics manufacturer. It competes with Microsoft's Xbox and Nintendo's Gamecube.

Microsoft is set to start selling its new gaming console in time for the 2005 holiday shopping season. Nintendo is expected to release its next-generation 'Revolution' device by 2006.