The Wall Street Journal reported today on Sony (SNE)’s re-entry into smartphones with a new product line of mobile devices, one of them a smartphone. They’re also developing a product that will be combining a number of forms of mobile devices, as WSJ reports:

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, these people said.

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.

Of course, this isn’t Sony’s first foray into mobile products: Sony Ericsson develops a multitude of mobile phones, including the one mentioned in the article, the Xperia X10, an Android-based mobile phone. (In the past, Sony Ericsson has stuck to using BREW-based operating systems, as well as Windows Mobile.) Unfortunately, sales for Sony Ericsson have fell, both in dumbphones (being dominated by the likes of Nokia and Motorola) and smartphones (BlackBerry and Apple).

If anyone’s going to be challenging Apple, though—Sony is the one. Although Sony’s products have been experiencing serious flak and unpopularity, there are some reasons

The Apple Touch Bloc is Breakable

We’ve seen real competitors to the iPhone (AAPL) emerge—namely, on Google’s (GOOG) Android platform. Phones like the Motorola (MOT) Droid and the HTC Nexus One have presented themselves—and proved themselves—as good enough to compete and take market share against the iPhone. During September to December 2009, Android OS experienced a 208% market share gain (comScore), to 5.2% of the smartphone market. Apple’s Reality Distortion Field is in effect, but it isn’t clouding the public perception enough.

It’s possible to recover and be taken seriously — see Palm

Sony Ericsson has been a declining company. However, it’s possible for a company such as Sony to recover and release a brilliant product. This has happened within the reign of the iPhone: see Palm. There isn’t really any other company one can look to for an example that is as antiquated as Palm. A leader of the 90s and early 00s, Palm declined—and stayed quiet—until the release of the Palm Pre, thought of as the iPhone killer. (It wasn’t.)

Sony has the technology and expertise

Sony knows how to design excellent phones, both technically and aesthetically. The Xperia X10 is an excellent example of Sony’s ability to develop superb devices. With years of experience with Sony and Sony Ericsson, they could very well develop a groundbreaking mobile platform line.