Rumors of a PlayStation-branded cell phone have been flying around for a few years now, most likely due to the numerous PSP redesigns. In fact, some rumors have even went as far as confirming Sony Ericsson as the manufacture of the alleged device. Just when the rumors died down with the advent of the PSPgo, the rumor is revived.
The latest rumor is claiming that Sony not only wants to compete with the iPhone‘s application store but the product itself by releasing their own all-in-one cellular communication and gaming device (ala a PlayStation branded phone). While the source of the rumor, Nikkei, did not specifically mention the PlayStation brand, it would only seem logical for Sony to license the brand if they choose to make a gaming phone, similar to how the iPhone transferred over to the iPod brand.
When asked about the report, Sony has made no comment on the rumor meaning they haven’t confirmed or denied the existence of a “PSP phone”. In other words, don’t get your hopes up, people.
[Source]