Report: Sony working on "cell phone/game gear hybrid"?

Rumors of a PSP phone have been floating around for years—after all, Sony makes PlayStation consoles, Sony Ericsson does phones, so it would seem like a natural fit—and the latest buzz has it that Sony is forming a "project team" to "develop" the idea. I'll believe it when I see it.

Reuters reports on a story in Tokyo's Nikkei business daily over the weekend, which claims that Sony will convene a team "as early as July" to begin drawing up plans for what it calls a "cell phone/game gear hybrid" device—or, in other words, something that "combines functions of its portable game player" (the PSP) "and Sony Ericsson's mobile phones."

A Sony PSP phone seems like an incredibly obvious product for Sony to build, but as SlashGear points out, behind-the-scenes squabbling between Sony and Sony Ericsson (a separate entity from the main Sony empire, jointly owned by Sony and—natch—Ericsson) over the PlayStation brand may have sidelined the project.

Sony, of course, has "declined to comment" on the Nikkei story—which, as SlashGear notes, marks "a change from the usual 'we have no plans'" denial. But still, even if the report is true, forming a "project team" is a long, long way from having an actual product to ship.

Sony Ericsson recently announced a new 3G handset—the Aibo—that lets users tap into a PlayStation 3 via "Remote Play" connectivity, good for watching videos, playing tunes, and viewing photos on their consoles. Pretty cool, but that doesn't quite quality as a full-fledged PSP phone.

So, what do you think: Would you be first in line for a PSP Phone? Just as soon hang onto your stand-alone PSP? Would a PSP Phone have a chance against the iPhone?

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Sony eyes cellphone/game gear hybrid [Reuters]