Will PlayStation create a branded smartphone?

Sony Corp. is planning to develop a ?cell phone ? game gear hybrid? to reach a new market with its video gaming business and to compete in the Apple iPhone platform.

Sony is planning to set up a development team this July to design a new product that combines the functions of the PlayStation Portable and Sony Ericsson?s mobile phones. Reports from Reuters confirm this and if it is true, the PlayStation smartphone will finally debut in the market after years of speculation.

Last May, Hideki Komiyama, president of Sony Ericsson, said that the new branded phone could happen if PlayStation and Ericsson work together.

Sony execs want to license the PS brand if Sony makes the handsets independently, which is an exit from the joint venture with Ericsson.

However, Ericsson said that the existing technology is not yet sufficient to design a PlayStation phone.

?In the past, we have been keen that our product proposition lives up to brand promise, and we feel at the moment the technical specs are not high enough to put such a prestigious brand on a phone,? said a spokeswoman for Sony Ericsson.

Both brands did not comment on the news report.