Update: Sony has provided a comment regarding a potential new device: "We've already announced that Sony (including SCE) and Sony Ericsson have been strengthening their collaboration in the networked mobile space. However, it is not our strategy to discuss future products or business plans before we make any formal announcements. Any media report that suggest details of the product or business is based purely on speculation."

A Sony mobile phone/game system hybrid may be in the works to compete with Apple's popular handhelds.

According to reports from Japan's Nikkei business daily, Sony plans to set up a project team to develop a new device that combines its PSP and Ericsson handhelds. No other details have been released.

We have contacted Sony for comment and will update the story as soon as we receive a response.

What do you think? Does the prospect of a PlayStation Phone interest you?

[Via Reuters]