Dell CEO Hints at Small Internet Device Like a Smartphone

Michael Dell may have been speaking from halfway around the world, but the voice of the CEO for a $20 billion company carries a long way. The topic was small-screen devices and specifically smartphones, a market with which Dell has flirted with but never quite taken the plunge. But Dell said that may change.

"It is true that we are exploring smaller-screen devices," he said. "We don't have any announcements to share today, but stay tuned, as when we have new news we will share that with you."

Crowded Market

The biggest question surrounding the possibility of a Dell smartphone product is whether it's simply too late. "The smartphone market is cluttered and crowded," said Greg Sterling, founding principal of Sterling Market Intelligence. Moreover, Sterling added, the market is overwhelmingly dominated by Apple's iPhone, which makes it very difficult for new entries to distinguish themselves.

In fact, there are reports emerging that last year, Dell built a prototype smartphone that was rejected by the major cellular carriers for a variety of reasons, including a thin set of features, lackluster design, and cost.

Now new rumors are circulating that Dell might try to leapfrog into the smartphone race by purchasing Palm, a company increasingly short on cash and in need of a major boost from the soon-to-be-released Pre.

"I think the possibility that Dell might buy Palm is an interesting story," Sterling said. "Palm's predicament is that too many expectations are being heaped on the Pre. It's an interesting phone, but it can't carry the whole company, which will undoubtedly disappoint investors."

Mobile Internet Device?

A more interesting possibility, Sterling suggested, would be for Dell to consider manufacturing a device larger than a smartphone that might have more capabilities.

"In the field of mobile Internet devices," he said, "there are some really interesting possibilities. If you solve the connection problem,...