A report in The Wall Street Journal said that the handset would not carry mobile phone components, but function as a handheld internet device only.
The report also suggested that the handset could hit the market later this year, although the decision to release the product has not yet been confirmed.
Dell has long been said to be working on various handheld devices. The company was rumoured to be developing a portable media player last year, and reports surfaced in early 2009 that a smartphone device was in the works.
If Dell does release a handset, the vendor will add its name to the growing list of companies jockeying for position in the market for internet-capable handsets and smartphones.
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