Sony is understood to be mooting the launch of a PlayStation-branded phone, calling into question its partnership with Swedish mobile company Ericsson.
It is thought the phone will incorporate elements of the PlayStation Portable (PSP).
It is understood the phone could hit the shelves in time for Christmas 2009.
Sony Ericsson currently uses Sony sub-brands Walkman and Cyber-Shot camera as key features of its phones.
Sources in Japan and Korea say Sony is working on converting the current PSP model into a phone. Analysts say it would be “relatively easy” to convert the current PSP as it already incorporates wi-fi.
Sony Ericsson launched its F305 gaming phone to a mixed reception last week. One analyst says it is “strange” that the model did not include the PlayStation branding.
Another industry source says the relationship between Sony and Sony Ericsson has become “frosty” and he adds that Sony has learned from its “strategic error” of giving its Walkman branding to Sony Ericsson.
An insider adds that internal conversations have already confirmed that Sony would “never give its PlayStation branding” to the Sony Ericsson joint venture.
Sony Ericsson was formed in 2001, and reported a 47% fall in profits for the first three months of the year. It is in fifth place in the handset market behind LG Electronics and Nokia, which is the market leader.
But Sony Ericsson global head of marketing James Marshall says the company is still in line to hit its 10% growth forecast for the global handset industry for 2008.
A spokesman from Sony Ericsson says the handset maker “never comments” on future product announcements. Sony PlayStation declined to comment.