PSP phone rumours are a regular occurrence but now credible sources claim that it is finally on the way as party of a Sony plan to battle the iPad and iPhone. Will Sony be able to bring the PlayStation Network, Sony Ericsson’s phone smarts and the PSP together in one package?

The Wall Street Journal says Sony is developing the PSP Phone as a combination of netbook, ebook reader, gaming machine and smart phone. Sounds like the PSP Phone is gunning for the iPhone and it’s bigger brother, the iPad.

Sony is apparently planning to link the PSP Phone to its own iTunes style service,the Sony Online Service, due to launch in the US later this month.

Sony’s clearly believes that putting all its ebook reader, audio player and gaming smarts in the PSP Phone will let it compete more with Apple. The PSP Go already relies on downloads for its games but will the PSP Phone be able to compete with the sheer breadth of iPhone apps and the growing power of Google Android?

Let us know what you think: is Sony on solid ground with its PSP Phone plans or should it stay focused on gaming alone?

Due TBC | £TBC | Via ElectricPig, Sony, WSJ