This wouldn’t be surprising but it would be exciting. According to a Japanese media publication a PSP phone is definitely in the works. Recently there has been denial of this from the Sony camp however, seeing as Sony is looking to take a jab at the iTouch market with their latest PSP Go! with it’s inflated pricing, one has to beginning asking themselves why wouldn’t Sony beef up their PSP to be a fully capable cell phone in order to rival the competition?

IGN writes;

According to the report, Sony has been laying the groundwork for a portable gaming handheld with full mobile communication capabilities. A project team will apparently be assembled in July, although the report did not specify which of Sony’s product divisions, Sony Computer Entertainment or Sony Ericsson would be helming the development.