Sony investigating PSP phone?

As recently as May Sony has itself stated that a PSP phone "could happen," and now a report from Nikkei business daily states that Sony is planning on putting together a team as early as next month to build product that would act as a combination of a PSP and a Sony Ericsson handset. It makes plenty of sense, both as a differentiation from Nintendo and as a confrontation of the looming iPhone threat -- and hey, it might also act as a decent salve over the lukewarm reception of the pricey PSPgo. Unfortunately, if Sony is just about to get started on this, we likely wouldn't be looking at any resulting product for a while to come. Sony declined comment according to Reuters, which doesn't mean a whole lot, but it's worth keeping in mind that we've been hearing this sort of rumoring since back when the N-Gage (as a product) was still almost relevant.

Reuters reports that Sony Corp is working on a cellphone/game player hybrid to better compete with Apple's iPod Touch and iPhone.

Sony plans to set up a project team as early as July to develop a new product that combines functions of its portable game player and Sony Ericsson's mobile phones, the Nikkei said.

Sony appears to be considering a number of different moves to go head-to-head with Apple's iPod Touch and iPhone platform. An earlier report claims Sony was talking to major recording companies about providing downloadable music to the Playstation Portable (PSP). While Apple's devices aren't dedicated gaming machines, there is a notable overlap in audiences and the App Store has started attracting major gaming developers such as Capcom, id Software, and Square Enix.

The PSP has sold over 50 million units