Sony Corp unveiled a new handheld gaming device, the first to feature 3G wireless connectivity, as it battles with Nintendo's best-selling DS and tries to fend off competition from smartphones including Apple Inc's iPhone.

The announcement came the same day as Nintendo, which is readying the launch of a 3D version of its DS next month, reported a 46 percent slide in quarterly profit below analysts' estimates. It also trimmed its Wii and DS sales forecasts for the year to March.

With Apple's iPhone eating into the market for portable gaming devices, both Sony and Nintendo need new products to boost sales and profit.

Sony said its new device, codenamed "NGP" for Next Generation Portable, will not go on sale until around the year-end and declined to say how much the device will retail for. Nintendo's 3DS will sell for 25,000 yen (US$302).

"The key will be pricing of the device," said Nobuo Kurahashi, an analyst at Mizuho Investors Securities. "If the company prices it cheaper than Nintendo's 3DS, it would be positive."

Sony's latest release will stoke market speculation the Japanese consumer electronics giant is readying a gaming smartphone.

Sony's NGP will feature a 5-inch OLED touch screen, larger than the 3.5 inches used for standard smartphones. It also has a back touch pad and a motion sensor.

By the end of the year, Sony plans to make PlayStation games available on other portable devices running on Google's Android operating system, through an application called PlayStation Suite.

Hurt by falling sales of its ageing DS ahead of the launch of the 3D-capable model, Nintendo's October-December operating profit was 104.6 billion yen, below analysts' consensus of 118 billion yen.