Sony has admitted defeat in the audio format war and will phase out its proprietary Atrac format in North America and Europe. The company will also close its Connect Music Services portal.

Sony made the announcement as it unveiled new products that will handle MP3, Windows Media Audio and Advanced Audio Coding files.

"With these new Walkman players, Sony has widened its digital music environment to support Windows Media technology," a Sony statement said.

"As a result, Sony will be phasing out Connect Music Services based on the Atrac audio format in North America and Europe."

Sony said that it had emailed Connect users to tell them of the service's eventual closure.

However, the company confirmed that Connect, which launched in 2004, would not close before March 2008 and that its Connect e-book service for the Sony Reader was not affected.