Dell plots smartphone foray, eyes Apple: WSJ

LOS ANGELES, USA: Dell Inc is plotting a foray into the cellphone arena as early as next month, making and selling smartphones to revitalize a business walloped by crumbling PC sales and pitting the firm against Apple, the Wall Street Journal reported on Thursday.

The world's No. 2 maker of PCs, which has been designing prototypes for over a year, is focusing on smartphones -- the class of high-end devices that encompasses Apple's iPhone and Research in Motion's Blackberry, the newspaper cited people familiar with the matter as saying.

If launched, the phones will be based on Google's Android operating system and Microsoft's Windows Mobile software, it said. One model will even feature a touchscreen, not unlike the iPhone's, the Journal reported.

However, Dell has not finalized its plans and may still abandon them, the Journal added without elaborating.

Shares in Dell climbed 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 holding steady.

Representatives for Dell and Microsoft declined to comment, and Google representatives were not available for comment.

Smartphones -- high end mobile devices that can assume many of the functions found traditionally on PCs, such as playing videos and music -- are the fastest growing segment of the cellphone industry.

IT consultancy IDC expects smartphone shipments to climb 8.9 percent globally in 2009, far outstripping a decline in the overall worldwide cellphone market.

U.S. PC giant Dell, which lost its mantle of world's largest PC maker to Hewlett-Packard about two years ago, has toyed with the idea of selling cellphones since early 2007, the Journal said.

Chief Executive Michael Dell, who returned in 2007 to the firm he founded, has explored new markets, but earlier attempts to diversify into new areas, including a plan to sell digital music players, were dropped.

Dell hired Ron Garriques, Motorola's former cellphone chief, to re-energize its consumer products division. But, under a non-compete agreement, Garriques was barred from working on mobile phones until February 2009.