At that screen-size, there's possibility of making the Vita thinner though, and depends on how it's designed, have the potential to be sold as a tablet device on top of a gaming device. ( not sure how to solve the thumb-sticks though )
As it is, Vita is too 'pure' a gaming device. It's can't become a phone without major, major compromises, and it's too 'small & thick' to be a tablet-alternative.
Any redesign of Vita going forward should work concurrently with the Sony Mobile division though. It would be best for both sides if they could share many similar components, and get cost-savings from there.