Dell developing handheld internet device

Report claims PC maker is branching into mobility

Dell is developing a handheld mobile device designed for internet access, following in the footsteps of rival Apple, according to a news report published in the Wall Street Journal last month.

Dell engineers are developing prototype devices that resemble Apple's iPod Touch but are slightly larger and lack cellular capabilities, according to a the report, which cities unnamed sources. Dell will begin selling the device later this year, though the plan could be scrapped.

The prototype devices are powered by chips designed by Arm and run the Linux-based Android OS, the report says. Most handheld devices, including smartphones, use chips designed by Arm.

Dell declined to comment about the device, saying it doesn't comment on rumours and speculation.

If the rumor is true, it will be the first entry by Dell into a category of devices called mobile internet devices (MIDs), which combine the attributes of smartphones and netbooks in a pocket-sized machine. However, MIDs have had trouble finding wide adoption, with users complaining about the small screens and poor battery life.

It is possible that Dell is developing an MID, but it may not see the light of day, says Jack Gold, principal analyst at J Gold Associates. Dell relies on volume sales, and entering an experimental product category like MIDs would be a risky move, he says.

"The MID takes them into a different space than the traditional PC installed base. Netbooks would be closer to what they are selling," Gold says.

Selling MIDs would be similar to selling smartphones, so Dell would need significant partnerships with wireless carriers who provide internet access services like WiMax, Gold says. It would also need strong partnerships with companies like Intel, which is pushing WiMax, to subsidise the hardware, he says.

Dell's last well-known pocket-sized device was the Axim PDA, which was scrapped in 2007 due to poor sales. Dell's major competitors, including Hewlett-Packard, Acer and Apple, are already present in mobile computing with smartphones and PDAs.

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