Sony is reportedly preparing to challenge Apple with a new line of handheld products, including a smartphone capable of running Playstation games.

According to the Wall Street Journal, Sony is also developing a portable device that “blurs distinctions” amongst netbooks, e-readers and the PSP.

The enigmatic device is apparently designed to compete against “multifunction” products such as Apple’s overhyped iPad tablet.

In addition, both the new smartphone and mysterious multifunction device are slated to work with Sony’s upcoming online media platform, which has been tapped as the company’s answer to Apple’s iTunes.

Meanwhile, an Enderle Group analyst told TG Daily that Steve Jobs had once used Sony as a “template” to rebuild Apple – and ended up with a “better” Sony than Sony.

“The two companies have been rivals for some time and just as Apple once focused on Sony, Sony is focused like a laser on Apple who now largely defines the markets that Sony once owned. It is only natural that Sony bring out products that increasingly challenge Apple as the move to take a market they think as theirs back from Apple,” explained Rob Enderle.

“Sony historically has been its own worst enemy though with conflicts across divisions and an inadequate focus on services and software preventing them from being much of an Apple competitor. Until and unless Sony steps up to provide the kind of total solution that Apple is famous for or redefines the market in a way that gives Sony an advantage over Apple it is doubtful they will be much of a threat.”