Dell smart phone to debut in China, Brazil

SEATTLE -- Dell Inc. is officially jumping into the "smart" phone market this month in a deal with China's biggest wireless carrier, China Mobile Ltd.

The Dell Mini 3, a keyboardless touch-screen phone that runs Google Inc.'s Android operating system, will also be available in Brazil later this year. The computer maker, based in Round Rock, Texas, would not say when the phone would reach the U.S.

Friday's announcement ends more than two years of speculation that Dell, now the world's third-largest PC company by unit shipments, would expand into the phone business.

The economic downturn abruptly halted growth in the computer industry this year as consumers and businesses held off buying new technology. Hewlett-Packard Co., the No. 1 computer maker worldwide, fared better than Dell because its business is more diverse. Acer Inc., a Taiwan-based company, pushed past Dell to the No. 2 spot in the most recent quarter on the popularity of its tiny, inexpensive netbook computers, a category Dell was slow to enter.

Dell, however, was one of the first computer makers to pair up with wireless carriers to sell subsidized netbooks with cellular data plans. One such deal with China Mobile helped lay the groundwork for the Mini 3 launch, which the two companies foreshadowed in August when they showed off a prototype of the Mini 3 at an event in Beijing.

Michael Tatelman, vice president of sales and marketing for Dell's global consumer business, said Dell wants carriers to have some control over the way the phone works. It chose the open-source Android system because it gives Dell many ways to customize the software - but didn't rule out making phones that run Microsoft Corp.'s Windows Mobile.

In China, the Mini 3 will be part of China Mobile's forthcoming OPhone line, a defensive play against the official arrival of Apple Inc.'s iPhone, which is sold exclusively by the smaller China Unicom Ltd.

Dell didn't release technical specifications for the Mini 3, but Tatelman said it sports a three-and-a-half-inch high-definition screen and "great sound" for listening to music or watching movies without headphones. It uses a touch-screen keyboard instead of a physical one.

Like the first legitimate iPhones in China, the first Mini 3s won't have Wi-Fi because of an earlier government ban on the technology. Tatelman said that over time, China's homegrown wireless technology will be built into the phone.

By the end of the year, the Dell Mini 3 phone will also be available in Brazil through Claro, part of America Movil SA, Latin America's largest mobile phone carrier.

Tatelman characterized the deals as having "limited exclusivity." He would not say whether Dell expects to produce phones for other carriers in the two countries, but indicated that at least in Latin America, expansion would be quick.

Papers filed by Dell with the Federal Communications Commission indicate the company is also laying groundwork to launch the phone in the U.S., where the iPhone remains the hottest gadget two years after its initial release and Android phones made by other hardware companies are starting to gain traction.

Tatelman would not say how long it would take for a U.S. version, but that "you have to assume that this is a global strategy."