Sony is finally considering the development of a PlayStation branded mobile phone that can try to take on Apple's hugely popular iPhone.

The Nikkei Business Daily is reporting that Sony is setting up a project team in the coming weeks to develop a new product that combines the functionality of a mobile phone and its popular PlayStation Portable games console, which has sold over 50 million units. As well as playing games, the new device would be expected to act as a remote control for the PlayStation 3 console and play movie, television and music content stored on the user's PS3.

The Japanese giant launched the iconic Walkman three decades ago and enjoyed a long dominance over the portable music market, but in recent years has seen its market share of the sector fall dramatically with the astonishing success of Apple's iPod. Sony has already used Walkman branding on Sony Ericsson mobile phones before, but in the past has deemed mobile phone technology not powerful enough to do the PlayStation brand justice.

On October 1, Sony will release a new version of the PlayStation Portable console called the Go, which like the iPhone and iPod, does not feature a disc drive or cartridge slot. Instead, users download games onto the device from the online PlayStation Store.