Rumors of a PSP phone have been floating around for a few years, but the latest word comes from the prestigious Wall Street Journal. Here’s what the Pulitzer Prize-winning newspaper had to say about a mobile phone that happens to play PSP games:

Threatened by Apple Inc.’s growing stable of portable devices, Sony Corp. is developing a new lineup of handheld products, including a smart phone capable of downloading and playing videogames, according to people familiar with the matter.

It sounds like a great idea, but the mobile phone market is so crowded. Apple’s iPhone OS is popular with consumers around the world. Google’s Android OS is rapidly growing its installed base. Nokia’s Symbian is still hugely popular in Asia and Europe. Microsoft will be going large with Windows Phone 7 Series in late 2010. Heck, even Palm is struggling with its polished and innovative WebOS. Is there room for another player?

While playing PSP games on a phone would be cool, the rumored device would need more to compete with the aforementioned mobile operating systems. I doubt this will happen, but a Sony phone that featured a custom build of Android and PSP functionality would be terribly interesting.

Sony is allegedly working on another device that “blurs distinctions among a netbook, an e-reader and a PlayStation Portable”.

What do you think of all these Sony PSP phone rumors? Would you be interested in one?

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