We continue to hear that Sony is hard at work on a refresh to the PSP for an announcement likely to come at E3 for actual launch before the holidays. The refreshed model is said to look more like the iPhone in design than the current PSP.

What we continue to hear favors a sliding form factor that is much like many of the cell phones that have been released these past couple of months with the controller sliding from under the new PSP. We also have heard that the refreshed PSP will feature a touchscreen with a dual analog thumb stick design, but offer standard controls, as well.

While there have been some fake mock up pictures circulating the Internet, these are clearly fakes, but do point out some interesting design elements that our moles indicate could make their way into the final design.

According to our moles Sony would like to get this refreshed PSP out the doors and generate some buzz for the holiday selling season. According to these insiders, PSP software development has lagged behind, with very few titles being released; and Sony believes that a sexy hardware refresh just might be the ticket to get sales moving again and get developers re-engaged in development for the PSP.