MOBILE WORLD: Sony Ericsson Reveals New Playstation Phone

Sony Ericsson Sunday presented a crossover of the popular Play Station Portable gaming console and a cellphone as part of new push to stake a claim on the consumer electronics market, jolted by Apple Inc.'s (AAPL) iPad tablet.

The new device, named Xperia Play, is the first attempt by a major manufacturer to combine cellphone and full gaming capabilities in the same product since Nokia Corp. (NOK) launched the sophisticated but ill-fated N-Gage in 2003, an expensive commercial failure that didn't satisfy the demands of either the gaming community or cellphone aficionados.

"Xperia Play will be much better than Nokia's old N-Gage," Sony Ericsson Chief Executive Bert Nordberg told Dow Jones Newswires ahead of the Mobile World Congress to be held here from Monday. "Since N-Gage was launched, technology has improved a lot and that will make gaming much more fun. For example, chipsets and graphics are much better now."

Sony Ericsson, a joint venture of Sweden's LM Ericsson Telephone Co. (ERIC) and Japan's Sony Corp (SNE), will make Xperia Play available next month in some markets. In the U.S., the phone will be available to Verizon Wireless (VRZ.XX) customers by the Spring, Sony Ericsson said in a press release.

That means the device should ship earlier than the "Next Generation Portable," or NGP, an updated PSP gaming console, presented last month as a rival to Nintendo Co. Ltd.'s (NTDOY) 3DS hand-held console. Sony said NGP will be available for the year-end holidays.

As in the case of Sony with NGP, Sony Ericsson didn't provide details on the pricing of the new device, saying it will depend on operators.

With Xperia Play, Sony Ericsson seeks to challenge Apple's growing clout among high-end electronics consumers. Like the iPad tablet, which is bigger in size and has a larger screen, the new device has wi-fi capabilities but can also connect to the Internet via third-generation high-speed mobile networks.

The device will be the first handset to meet the standards of Sony's new PlayStation Certified distinction, a set of specifications laid out by Sony to allow Android-based handsets to play older PlayStation games on mobile phones and tablet computers, as the devices become more important to the company's overall strategy.

Besides size, a key difference between Xperia Play and iPad is that the latter isn't specifically tailored for gaming. Xperia Play has a full set of controls resembling those of Sony's PSP, that can slotted into the body of the device when is not being used to play games.

The fact that Xperia Play runs on Google Inc.'s (GOOG) Android software, the most popular for smart phones, is another significant difference with iPad, which uses Apple's iOS operating system.

The launch at the Barcelona's trade fair, one of the largest for the industry, is a major gamble for Sony Ericsson--earnings at the joint venture, founded in 2001, have only improved recently after its global cellphone shipments declined a whopping 41% in 2009.

Sony also has much at stake. The company last year was forced to slash forecasts for shipments of PSP devices, and has taken an increasingly larger role in the joint venture with Ericsson--the world's largest maker of wireless networks--because of its expertise with smart phones, now central to Sony Ericsson's strategy.

At the same time, both the NGP and Xperia Play are important elements for the turnaround plan being implemented by Sony's Chief Executive Howard Stringer. Sony has made progress in cutting costs and streamlining its production, but it hasn't delivered a market-shattering product like Apple's iPad for years.

-By David Roman and Gustav Sandstrom, Dow Jones Newswires, +34 628 278718; david.roman@dowjones.com

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