Depending on which source you trust, Sony is either working on some kind of Playstation Phone or isn't involved in a project whatsoever. Engadget has released images of a leaked prototype of the phone, which looks like a typical slideout-keyboard phone, except instead of a keyboard, there's the makings of a Playstation controller. Along with the typical Sony makeup, it also includes a long touchpad in the middle that reportedly supports Multitouch. The machine would use MicroSD cards.
However, according to Gama Sutra, the initial response from Sony said that this was "definitely fake" and didn't offer any further comment. They changed their stance later from "definitely fake" to "no comment" and saying that it was just "rumor and speculation".
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For me, this is interesting on many levels. First off, from the screenshots and the articles, the phone would be running the Android phone OS - potentially 3.0. As a current user (and lover) of the Android system, this would be a big win for both Google and Sony. Second, despite the title of the Gama Sutra article, this does NOT appear to be some sort of PSP - some commenters are speculating that this could be the PSP2, but it definitely will not have any sort of backwards compatibility with the current PSP system, judging entirely on the MicroSD technology. However, and most importantly, the system specs are much more powerful than the current PSP ("...runs on a 1GHz Qualcomm MSM8655 chip supported by 512MB of RAM. The current PSP, by way of comparison, has a 333MHz processor with 32MB of RAM..."), so it could be the next wave of portable gaming for Sony.
I didn't realize until last week the popularity of the current PSP - I had written it off as an unimpressive and unsupported console, but was completely floored when I wandered into the PSP section at Fry's and saw a ridiculous selection of quality games. It would be an incredible risk to ask gamers to switch their phone to enjoy the next generation of games - especially when the people most likely to enjoy this sort of gaming are probably the same people who are already owners of SmartPhones. They certainly wouldn't convert people over from the iPhone, and current users of the Android system would have to be persuaded to switch over to the new hardware simply for the addition of the gaming functionality.
I kinda hope this isn't true.
Source:
Engadget,
Gama Sutra