Shortly after Sony officially announced the PSP Go at the 2009 Electronic Entertainment Expo, reports surfaced that the electronics maker was already working on a follow-up to the handheld device. According to a report out of Japanese business newspaper Nikkei in June, Sony began assembling a product-development team tasked with combining the PSP's game-playing functionality with Sony Ericsson's mobile phone technology to better compete against Apple's iPhone.

　　The PSP Go may shortly no longer be the new kid in town. Following on from that initial report, the Wall Street Journal claims knowledge that Sony is readying a whole line of new handhelds, including smart phones capable of downloading and playing PSP games. Sources tell the WSJ that Sony is also prepping a multifunctional iPad competitor that combines the capabilities of a netbook, the Sony Reader, and the PSP.

　　Both products are expected to launch sometime in 2010, the WSJ reports. However, many details, including pricing and specific features of the devices, have reportedly yet to be nailed down.

　　As previously reported, the new devices are intended to combat Apple's dominance of the portable market. The WSJ notes that Sony intends to have the new devices integrate with its iTunes competitor, currently called Sony Online Services, which is expected to launch later this month. Sony promises it will deliver content to a wide array of devices, including PlayStation 3s, PSPs, PCs, and Internet-enabled HDTVs and Blu-Ray players.

　　Sources also tell the WSJ that the new devices are central to Sony's turnaround plan, an initiative the Japanese giant began in earnest by cutting some 16,000 jobs in December 2008. It also comes as Sony struggles in the mobile market. Sony Ericsson cell phone shipments fell 41 percent in 2009, the WSJ notes.

　　The publisher also drastically cut its PSP shipment expectations from 15 million to 10 million for its fiscal year ending March 31, 2009, as part of its earnings report last month. The decline comes despite Sony's attempt to carve out a larger share of the handheld gaming market with the launch of the UMD-less PSP Go for $250 in October.