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The Wall Street Journal on Tuesday cited two people familiar with the matter as saying the device will run Google's open Android software and possibly employ ARM-based microchips similar to those currently found in Apple's multi-touch handhelds.
Dell reportedly began developing the gadget last year with the help of engineers that were once tasked with conceiving a direct rival to the iPod. That project was aborted, and the Journal noted that there's no certainty that the electronics maker's latest efforts to develop a mobile internet device (MID) won't be similarly "delayed or scrapped entirely."
Still, Dell is said to be exploring the idea of marketing its embryonic MID with the help of wireless carriers who would presumably supply the device with 3G or other connectivity. Those carriers would likely subsidize the cost of the gadget alongside lengthy service agreements.
People familiar with the project told the Journal that Dell would ideally begin selling its new MID, which is slightly larger than an iPod touch, later this year alongside a series of mobile handsets that will also run Android software.