I don't understand the question. Are you saying they are going to use the PSP Go to target the iPhone, or that they are going to make a phone that plays PSP games and has the PSN to target the iPhone?
Either way it will never work. If you meant the PSP Go, it will be too expensive and no where near as much content as the iPhone. It will also have much more expensive games.
If they made a PSPhone, it would still fail to take down the iPhone because it would again be too expensive or lack a lot of the iPhone features.







