Smart phones by Dell soon - analysts

TAIPEI/BEIJING: Dell (DELL.O), the world's No.2 PC brand, plans to enter the lucrative but crowded smartphone market by year-end with an initial rollout in China as it looks for new revenue sources, two analysts said on Tuesday.

The analysts, speaking on condition of anonymity because Dell has not confirmed the plan, said Dell was working on handsets with Chi Mei Communications, an unlisted unit of Taiwan electronics giant Hon Hai (2317.TW), while China-based software maker Red Office is designing the phones' operating system.

Spokesmen from Hon Hai's office in Taiwan and Dell offices in China and Singapore had no comment, but a Red Office spokeswoman confirmed her company was developing an operating system for a smartphone for Dell.

"We're still in preliminary development of the software, and haven't done any publicity on this yet," said the Red Office spokeswoman.

The two analysts said they had verified the news with officials at Chi Mei, which already counts Dell as a client.

Many top electronic makers typically design their products in-house but rely on contract manufacturers such as Hon Hai and Singapore-based Flextronics (FLEX.O), who have large production facilities in lower-cost countries.

The analysts could not provide details on what mobile carrier in China would offer the phones. But they said the roll-out would occur first in China, the world's largest cellular market by subscribers, followed by the United States and Europe.

Buzz about Dell's potential entry into the smartphone business has circulated since the beginning of the year, though the company has not commented.