Dell has confirmed it's developing mobile devices for China Mobile, sparking speculation that the computer maker is getting ready to enter the highly competitive smartphone market.

Dell has long been rumored to be working on a smartphone, but has remained silent on its plans, including its current deal with China Mobile.

"What Dell is confirming is that we are in mobile product development for China Mobile," spokesman Matt Parretta told InformationWeek Monday.

Parretta confirmed that China Mobile on Monday showed off a "proof-of-concept" mobile device prototype built by Dell at an event to introduce the wireless carrier's online application store, which offers music, video, and applications for the mobile phones China Mobile offers. Parretta refused to discuss the device that was displayed.

However, tech blog Engadget reported that the device, called the Mini 3i, had a 3.5-inch touch screen and ran the Android-based Open Mobile System.

In partnering with China Mobile, Dell is working with the world's largest mobile phone operator, with more than 415 million subscribers. While Dell has not made any official announcement, industry observers believe the computer maker can't ignore the growing smartphone market.

However, successfully launching a smartphone or mobile Internet device won't be easy. The smartphone market is crowded with strong players, such as Apple, Research In Motion, and Nokia. In addition, Dell has a poor track record of moving into new markets.

In November 2008, the company nixed plans to release a digital music player before the holiday season. It would have been Dell's second attempt. The company launched a line of MP3 players in 2003, but poor sales led it to pull the plug on the line in 2006.

Nevertheless, reports that Dell is ready to launch an Internet-enabled device persist. The Wall Street Journal in June reported that Dell was working on an Android-based pocket-size device slightly larger than Apple's iPod Touch that could be released this year.

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