PC Maker's Mobile Foray Is Also a Boost for Google's Android Software

By JESSICA E. VASCELLARO And JUSTIN SCHECK

In a big win for Google Inc., Dell Inc. plans to introduce a smart
phone using Google software on the AT&T Inc. cellular network,
according to people briefed on the plans.

Dell is expected to launch the phone in the U.S. as soon as early as
next year, these people said. With an AT&T deal, all four major U.S.
cellular networks would carry phones using Google's Android operating
system, a key step in the Internet giant's attempt to extend its
dominance of the personal-computer world to mobile phones.

The phone would be Dell's first dive into the competitive U.S.
cellphone market. The device, like Apple Inc.'s iPhone, has a touch
screen instead of a keypad as well as a camera, said the people
briefed on the plan. Dell's AT&T phone is similar to a device Dell
showed in China in August, but has some different features, these
people said.

Dell's device relies on Android for behind-the-scenes technology that
runs programs like a Web browser, music player and games. Google has
been trying to expand Android's use for close to two years.

After a slow start, Android has been gaining steam in recent months.
The software has slowly gained popularity as consumers come to expect
mobile devices to act like computers. Google said this week that nine
Android devices have been announced, across 32 wireless carriers in 26
countries.

The Dell phone would bring the system to AT&T, the U.S.'s
second-largest wireless carrier by subscribers and home to the iPhone.
On Tuesday, the largest U.S. carrier by subscribers, Verizon Wireless,
said it would launch its first two Android devices this year.

The Android system has yet to create real financial benefits for
Google, which offers Android free of charge and expects to profit by
using it as a way to push other Google products, like maps and mobile
search.

Dell is also talking to other U.S. carriers, including Deutsche
Telekom AG's T-Mobile USA Inc., about offering the device, according
to one person briefed on its plans. Dell already sells
netbooks—inexpensive mini laptops with broadband Internet
connections—through cellular operators.

A Dell spokesman declined to comment on U.S. cellphone plans. In an
emailed statement, Michael Tatelman, a vice president of Dell's
consumer division, said the company is "deeply engaged with our
operator partners around the world" to sell non-computers, and said
the company continues "to explore" other opportunities.

Dell's revenue has slumped as it has lost PC market share to rivals.
To reverse that drop, founder Michael Dell returned as chief executive
in early 2007 with a plan to expand the company out of PCs into
lucrative new devices.

Dell identified smart phones as an important area because consumers
are relying on them for things they used to do on PCs, said people
briefed on Dell's phone plans. In August, Dell announced that it would
develop handsets for China Mobile Ltd., China's largest cellular
carrier.

http://online.wsj.com/article/SB10001424052748703298004574459380459235704.html?mod=WSJ_hpp_MIDDLENexttoWhatsNewsTop

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