Report: Dell Readying SmartphoneReport: Dell Readying Smartphone

The reports of a Dell smartphone have been on-again/off-again for two full years. Now, analysts are saying that Dell is set to debut a new smartphone as soon as the Mobile World Congress show in Barcelona next month.The refreshed rumors come from Kaufman Bros. analyst Shaw Wu. He recently said in a research note, "The exact timing of Dell's launch is not clear but our sources indicate it is closer to reality than before. We believe it is likely inevitable that Dell enter the cellphone space given the cannibalization of PCs by smartphones and highly functional mobile devices."

If Dell chooses to unveil a smartphone in February, it will be entering a brutal market. The number of new and highly capable smartphones in the market is at an all-time high. Just last week, we saw the exciting debut of the Palm Pre with Palm's webOS, the BlackBerry 8900 from RIM, and the MOTOSURF from Motorola. In the last six months, we've also seen the BlackBerry Storm and Bold, the iPhone 3G, the Nokia N97, the HTC G1 and myriad Windows Mobile phones from a slew of manufacturers. Where would Dell fit in this mix and compete?

First, Dell would have to go with Microsoft's Windows Mobile platform. It just doesn't make sense for Dell to pick either Android or Symbian. This means Dell would have to rely on its enterprise base if it hopes to sell smartphones. Dell canned its Axim series of PDAs about two years ago, which is around the same time it brought on former Motorola superstar Ron Garriques. Word then was that he was brought on board to launch a new line of consumer eletronics for Dell. Dell could draw on its experience making PDAs and Garriques' cell phone pedigree to churn out a smartphone. So far, we haven't see anything yet.

Looking at Dell's direct competitor, HP, I think Dell has a serious uphill battle to fight here. HP's own line of smartphones, while capable, have not exactly set the market on fire. Dell would have to offer a killer combination of hardware, new software functionality and social networking integration to truly have a hit.

Can it do all that?