If Sony goes after the iPhone, they will get crushed, and I doubt they will try and replace the PSP right away... so when the SonyPhone withers on the vine, the emphasis will shift back to the PSP as their handheld gaming device.
Sony really had something when the Walkman came out many years ago, but since then they've struggled to really tap into what consumers want in a portable music device... they're very prone to pushing proprietary tech (MD, UMD, etc.), but to do that, the rest of the package has to be compelling. Apple has polished this to an art considering the devices have no storage expansion options, are tied at the hip to iTunes, etc., but yet they control about 80% of the music-player market, and they appear to be doing really well in the smart phone market. Sony had better have something drop-dead incredible to take on the iPhone. Considering Sony's inability to storm the market with the PSP, PS3, and Blu-Ray (adoption is still a small percentage of DVD), I would have to say their chances in the smart-phone market are low.
