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They're back. Rumors of Dell's (NASDAQ: DELL) foray into the smartphone market are once again in the news, thanks to a Wall Street Journal article that said the PC maker has been working on prototypes for the past year.
The number 2 PC maker, which is struggling to stave off a continued erosion in PC market share, has prototypes built on Windows Mobile and the open source Google Android platform, with launches expected as early as this month, the Journal reported.
In addition, Web site Apple Insider pointed to recent statements by analysts for Kaufman Brothers that suggest Dell could be making a splashy smartphone announcement at the 3GSM conference in Barcelona this month.
According to the WSJ report, Dell is developing high-end handsets featuring the touch screen and no keyboard approach, just like the Apple iPhone. The second reported device includes a keyboard that slides beneath the screen.
Despite the recession, smartphones are selling, well, like smartphones these days, according to a recent Gartner study. The research firm reported worldwide sales hit 32.3 million units in the second quarter of 2008 -- a 15. 7 per cent jump over the second quarter of 2007.
If only PC makers could cite similar sales stats. Dell has lost market share since it was toppled from its #1 perch by HP in 2007, according to Gartner Research.
Dell's smartphone strategy would mostly copy the one forged last year by top PC player HP, said analysts.
HP launched its 3G HP iPAQ 912 Series Business Messenger using Windows Mobile 6.1 in September, 2008. It was HP's second smartphone offering in the past 22 months.
"Their [Dell] enterprise base is very strong so I would predict that's where they would be headed logically," Philippe Winthrop, a director and enterprise mobility analyst for Strategy Analytics, told InternetNews.com.
If Dell moves into market, Kagan said it would need a groundbreaking handset to be a success even with an enterprise base it would sell into.
"It would have to come up with a pretty hot new device that goes beyond traditional smartphones. There are no guarantees on success," said Kagan.