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Report Claims Dell Is Gearing Up To Enter Smartphone Market

January 30, 2009

The Wall Street Journal reported on Thursday that Dell is looking to enter the cell phone business as early as next month.

The new foray into making and selling smartphones is Dell’s attempt to revitalize a business staggered by slowing PC sales, as well as another direct challenge to Apple.

The company has been designing prototypes for over a year and is focusing on smartphones””the class of high-end devices like Apple’s iPhone and Research in Motion’s Blackberry.

The phones are reportedly based on Google’s Android operating system and Microsoft’s Windows Mobile software, Dell said. A touch screen similar to the iPhone’s will be featured on one model, the Journal reported.

The Journal said, however, that Dell has not finalized its plans and may still abandon them.

Dell shares reached 1.4 percent in after-hours trade, barely denting an 8.6 percent dive during the regular session to $9.95. Microsoft stock was up 1.3 percent, and Google shares were stable.

So far, there has been no comment from representatives at Dell, Microsoft or Google.

Consumer research shows that smartphones are the fastest growing segment of the cell phone industry. These high-end mobile devices that can assume many of the functions of a PC, like playing videos and music and the ability to have mobile email.

Smartphone shipments are expected to increase 8.9 percent globally in 2009, far outstripping a decline in the overall worldwide cell phone market, according to IT consultancy IDC.

The Journal reported that U.S. PC giant Dell has toyed with the idea of selling cell phones since early 2007.

Chief Executive Michael Dell has explored new markets, but earlier attempts to diversify into new areas, including a plan to sell digital music players, were dropped.

Ron Garriques, Motorola’s former cell phone chief, was recently hired by Dell to re-energize its consumer products division. But Garriques is currently barred from working on mobile phones until February 2009, due to a non-compete agreement with his former company.

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