Sony Corp. is developing a new lineup of handheld products, including a smart phone capable of downloading and playing PlayStation games, specifically to compete with Apple’s iPhone, iPod Touch and iPad, the Wall Street Journal reported this morning. The new gadgets are scheduled to launch this year, sources told the Journal.

Sony is working with Sony Ericsson on the new handset, the people familiar with the matter said.

The new devices are meant to counter Apple and its wide range of products that connect to its iTunes media platform. Apple’s iPod Touch and iPhone are pushing into the portable-gaming market inhabited by Sony’s PSP, while the iPad tablet is expected to disrupt the nascent e-reader market where the Sony Reader has already sold one million units.

The Japanese electronics giant also has a project under way to develop a portable device that blurs distinctions among a netbook, an e-reader and a PlayStation Portable, or PSP. The device is designed to compete against multifunction products such as Apple’s coming iPad tablet.

Both the new smart phone and the multifunction device are expected to work with Sony’s online media platform, due to launch later this month in the U.S. as the company’s answer to Apple’s iTunes.