shame they didn't think of this earlier, they could have based this uber phone on the Xperia X10 by writing an app for it that ties it into the playstation network.... 850x480 sceen and 1gig processor would make it hard to beat in that respect.

"Sony might be working on a smartphone to compete with Apple on a level beyond its current and flagging Sony Erricson portfolio."

Why would they bother trying with smartphones? Crackberries have that one sealed up. SE do make some of the better multimedia phones that annihilate junk like the Iphone. It seems pointless to ignore this market in favour of smartphones.

Also @Andydread - uber-proprietary and uber-DRM-infected? Sony has been bad at times, but compared to Apple they are positively saintly.

Sony? Anything from them is sure to be uber-proprietary and uber-DRM-infected. Not to mention they uber-lobby and uber-pay the congerss critters here in the US for more draconian copyright laws.
Sony? No thanks.
When they quit their draconian and proprietary ways and leave the content business then we will consider recommending them to our customers again. Not before.

To be fair to Sony, they have been having a rough time of late. However if they want to roll out this uber device, they really need to focus on improving the infrastructure that powers the Playstation network.
At the moment it's download speeds are relatively slow compared to other services which are available (xbox Live and itunes are the main ones I'm thinking of). I do think that with the right design and execution, Sony Entertainment Network services (surely they can't roll out the Playstation brand onto EVERYTHING) could be a winner, however it will fall down if content delivery speed isn't drastically improved to be as good or better than it's competitors.