Sony hasn’t been doing so well lately, and it is formulating a plan to come back swinging. While manufacturers like Apple and Microsoft haven’t been increasing their presence in the consumer electronics space, Sony has been trailing behind. The iPhone is increasingly becoming popular for gaming and Microsoft’s Windows Phone 7 will feature Xbox Live and Zune features. It’s going to be very competitive and tricky for Sony, the the Japanese manufacturer does have a game plan.

Mobile devices like smartphones, eBook readers and tablets are becoming all the rage; Google even says that devices like smartphones can make desktops irrelevant in just three years. With Sony’s PSP aging and the PSP Go not experiencing much popularity, a PlayStation smartphone could be its saving grace. According to the Wall Street Journal and “sources familiar with the matter,” Sony will be working with Sony Ericsson, its joint mobile venture, in cranking out handsets and devices that will integrate PlayStation features and Sony Online Services.

Nothing is set in stone and there is still a lot unknown about what may happen, but if the rumors are correct, we can expect to see some of these devices as early as the end of this year.