Dell reportedly developing Android-based rival to iPod touch

Dell is developing a pocket-sized Internet device using Google's Android operating system that could take on Apple's iPod touch, according to a report in The Wall Street Journal on Monday.

Two people who have seen early prototypes of the device told the newspaper it looks like the touch but is slightly larger. And, like the touch, the device isn't expected to include a phone. The device is considered part of a category of gadgets called 'mobile Internet devices' (MIDs), which are designed to fit into the market between a mobile phone and a laptop or netbook computer.

The device could go on sale as early as the second half of 2009, according to The Wall Street Journal's sources.

Dell supposedly started working on the new device about a year ago as a way of competing against Apple's iPod business. The newspaper also cited an unnamed source who said that Dell has considered selling the new Internet device through a mobile-phone carrier. 

Dell has long been rumoured to be making a smart phone. The company has also been rumoured to be testing the Android software for its smart phone and possibly for its netbooks. With these developments in the works, it probably wouldn't take much to also develop a portable Internet device using the same operating system without the phone. That's what Apple did with the iPod touch.