When Sony was talking about a new handheld a few years back, a lot of people expected a radical evolution, a device that would integrate gaming with Internet browsing and telephone services. Instead, the company launched the PSP Go, which is an aesthetically evolved handheld that gets all its content from the PlayStation Network and does not have a removable battery anymore.

And now a respected source of business news like the Wall Street Journal is citing sources inside Sony as saying that the company is aiming to create a competitor for the recently unveiled iPad from Apple.

The new handheld will combine the game playing power of the PlayStation Portable, the digital book powers of the Sony Reader and the functions of a netbook. Apparently, the development of the fresh Sony device, which does not yet have a clear name, is quite far along and an announcement might arrive this year at one of the big trade shows.

The WSJ revelations come just as the company has been talking about a new strategy being implemented, which puts the PlayStation Network at the center of its operations, using the online hub to deliver content to a lot of separate devices, from televisions to gaming consoles. The PSP Go has also not been performing too well and with Sony Ericsson phones also seeing a sales slump, Sony needs a fresh gadget to reinvigorate its fortunes in the mobile world.

Microsoft also made a move to offer full Xbox Live services to mobile phones with its new software suite, which might mean that both console manufacturers are looking to extend the reach of their online services as a way of attracting more players to their home consoles. Both the Xbox 360 and the PlayStation 3 need all the help in sales department they can get as they try to overtake Nintendo's Wii in terms of sales.