Why China and Brazil? Well, for one thing, they are developing markets. For another, Dell (DELL) already has partners there.

“Besides size (China Mobile has over 500 million subscribers, and Claro serves more than 42 million), we have existing telecom partnerships with them,” Dell blogger Lionel Menchaca said in a post. “Back in April, we were the first to embed China Mobile’s technology into our Mini 10 netbook. And if you’ve been watching, you know Dell has agreements with lots of other providers like Vodafone in Europe, Australia and New Zealand. We’ve partnered with AT&T and Verizon in the United States to offer mobile broadband on different products, and we have agreements with other carriers in Asia.”

Interesting. Presumably this means we’ll see the Mini rolled out in short order in these other countries as well. As you may recall, Dell was rumored to be building an Android handset for AT&T (T) in early October.

While this might seem optimistic for an OS that is found on less than two percent of all smart phones today, it’s not entirely unreasonable given the distribution deals Google (GOOG) has been lining up. Yesterday, the search giant announced a deal to bring Android-based devices to Verizon Wireless (VZ). Now comes word that Dell (DELL) is building an Android handset for AT&T (T). People briefed on the companies’ plans tell The Wall Street Journal that the device is similar to the one the PC marker has been showing off in China and is scheduled to hit the market sometime in early 2010.

PREVIOUSLY:

• Dell Dullephone Sighted in China
• Dellephone? More Like Dullephone…
• Dude, Your Phone Is Dull
• Dellephone?

[Image Credit: mobile.163.com]

While this might seem optimistic for an OS that is found on less than two percent of all smart phones today, it’s not entirely unreasonable given the distribution deals Google (GOOG) has been lining up. Yesterday, the search giant announced a deal to bring Android-based devices to Verizon Wireless (VZ). Now comes word that Dell (DELL) is building an Android handset for AT&T (T). People briefed on the companies’ plans tell The Wall Street Journal that the device is similar to the one the PC marker has been showing off in China and is scheduled to hit the market sometime in early 2010.

PREVIOUSLY:

• Dell Dullephone Sighted in China
• Dellephone? More Like Dullephone…
• Dude, Your Phone Is Dull
• Dellephone?

[Image Credit: mobile.163.com]

Unveiled in China this morning, Dell’s (DELL) new handset, reportedly known as the mini3i, runs on China’s Open Mobile System variant of Google’s (GOOG) Android OS and sports a 3.5-inch, 640×360 capacitive touchscreen and a three-megapixel camera. It also features an iPhone-esque GUI and will support applications from China Mobile’s online store, which peddles music and videos as well as games and other apps.

But sadly, the mini3i lacks WiFi and 3G support. It’s strictly a 2G device. Odd, considering China Mobile does offer TD-SCDMA, China’s locally developed 3G standard.

That said, China’s smartphone market is wide open. With mobile phone sales in the country predicted to hit 192 million units, up from 180 million this year, according to Gartner (IT), a cheap smartphone like this could find quite a niche in the lower end of the market, assuming it’s well-priced.

News of the mini3i’s debut comes as Apple works to bring the iPhone to China via China Unicom.

On Friday, China Unicom denied a report by China Business News that the company had inked a three-year exclusive iPhone deal and agreed to purchase five million of the devices. “The report is not true,” a spokesperson said. “Talks between us and Apple have been going on for some time, but no agreement has been reached yet. There are all kinds of possibilities. There is no particular timetable for the talks.”

UPDATE: Dell claims the device displayed in China is a “proof of concept.”

“The only thing that we’re confirming is that we’re in product development with China Mobile,” he told PCMag. “We haven’t named any products, and we’re not confirming anything. We were there showing a proof of concept.

PREVIOUSLY:

• Dellephone? More Like Dullephone…
• Dude, Your Phone Is Dull
• Dellephone?

[Image Credit: mobile.163.com]

According to Sacconaghi, the smartphone market isn’t a natural fit for Dell, which could see its efforts hamstrung by its historically lousy industrial design sensibility and lack of software development experience and wireless technology, not to mention unenthusiastic carriers hesitant to add a Dell phone to their lineups.

“We believe Dell’s foray into the smartphone market is risky and its success uncertain,” Sacconaghi writes. “In our view, the biggest risks are that (1) Dell invests a disproportionate amount in the initiative…; (2) the high margins earned on smartphones today collapse by the time Dell establishes itself in the market…; (3) it causes too much management distraction…; (4) the business simply fails.”

(4) the business simply fails.

A harsh prediction–especially when we don’t even know if the business will ever exist. Clearly, Sacconaghi doesn’t have much faith in Dell’s ability to execute on an initiative like this. And why should he? Dell’s track record in adjacent electronics businesses is littered with the corpses of PDAs, MP3 players and TVs.

Ugly just isn’t going to cut it in today’s mobile device market. That’s what Dell is finding as it attempts to build a smartphone capable of holding its own against the RIM’s (RIMM) Blackberry, Apple’s (APPL) iPhone and Palm’s (PALM) upcoming Pre.

According to Kaufman Bros. analyst Shaw Wu, the PC maker’s first smartphone prototypes have been rejected by wireless network operators, which found them dull compared with current and upcoming devices. “From our conversation with supply chain and industry sources, it appears that it ultimately came down to lack of carrier interest and small subsidies, making it difficult for Dell to make a profit,” Wu explained in a message to investors, noting that prototypes running Microsoft’s (MSFT) Windows Mobile and Google’s (GOOG) Android both were dismissed by carriers for their “lack of differentiation.”

Apparently, Dell’s “nondescript and gray” aesthetic just doesn’t translate to the cellphone market.

Undaunted by such criticisms, Dell (DELL) has gone back to the drawing board in the hopes of designing a more appealing device and may even consider an acquisition to spur such efforts along. Said Wu, “Dell remains committed to the cell phone space as it appreciates the opportunity in smart phones and the longer-term cannibalization potential of PCs.”

Seems Dell’s new Global Consumer division–led by Motorola’s (MOT) former mobile device head, Ron Garriques–has been busy this past year.

“The exact timing of Dell’s launch is not clear but our sources indicate it is closer to reality than before,” explains Wu. “We believe it is likely inevitable that Dell enter the cellphone space given the cannibalization of PCs by smartphones and highly functional mobile devices.”

For Dell (DELL), which Wu describes as “in the midst of an identity crisis,” a move into the smartphone market may be a risky bet. As Apple (AAPL) has shown us, the handset space thrives on innovation–something for which Dell isn’t exactly known. And now, with the advent of the Palm Pre (PALM) and Google’s (GOOG) Android, not to mention the continuing dominance of RIM’s (RIMM) iconic BlackBerry, it’s more crowded and competitive than ever. That said, Dell may have no choice but to enter it.

Says Wu, “Perhaps the tough macroeconomic environment buys the company some time, but we believe Dell needs to send a stronger message to its customers and investors by taking bigger and bolder steps than it has done so far. Entering the cellphone market could be the catalyst, but we believe it needs to be careful in its strategy as the cellphone market is similar to the PC market where most devices are low margin commodities and the winners are vendors with very differentiated products.”