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Rumor: Sony developing PSP phone to challenge iPhone

In terms of sales, Sony's PSP has been getting trounced by the various incarnations of Nintendo's DS since day one. Despite the PSP's better graphics and flexibility as a mobile media platform, the DS has grabbed hold of the handheld gaming market and shows no sign of letting go.

Since the introduction of the App Store in 2008, a new mobile gaming juggernaut has emerged, seemingly out of nowhere -- the iPhone/iPod touch. With the forthcoming launch of the iPad, whose larger screen and more powerful CPU could make it a gaming powerhouse, it means there are now three very big players in the mobile gaming market... and Sony is in an untenable position already.

Sony is hoping to change that. According to a leak to the Wall Street Journal, Sony is hard at work developing a range of handheld products designed to compete directly with Apple's mobile platform. One, a smartphone built in tandem with Sony Ericsson, would be a PSP phone designed to compete with the iPhone and iPod touch; the other, a hybridization of a PSP, e-reader, and netbook, would be Sony's answer to the iPad. Both devices would have a dedicated online store available to them, but the store itself isn't scheduled for deployment until later this year at the earliest.

I'm going to give Sony some free advice: if you want to have any hope of even competing with Apple's mobile platforms, to say nothing of surpassing them in sales, then gather up the marketing and engineering teams that developed the PSP Go, march them into an auditorium, and fire them all. The PSP Go has been savaged in reviews for its high price point, limited functionality compared to the older full-sized PSP, and download-only gaming catalogue. All these factors have combined to make the PSP Go a failure in the marketplace, and deservedly so.

Granted, the games catalogue for Apple's mobiles is also download-only, making traditional gaming conventions like buying and selling used games just as impossible as it is on the PSP Go. But there are three ways Apple's App Store buries Sony's online store under a pile of cat litter: the number of games available is staggeringly higher, the average price of games is far lower, and the App Store is much easier to navigate.

To its credit, Sony not only knows the PSP Go is a failure, but more importantly, the company also appears to know why. If Sony can learn from that failure and apply those lessons to the forthcoming handheld challengers, it might be in a position to regain some of the ground that's been lost in the mobile gaming marketplace.

[Via electronista]

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