Summary:

With Apple (NSDQ: AAPL) demonstrating that there is almost as big of a market for the iPod Touch as there is for the iPhone, it’s no wonder…

Dell Android Phone

With Apple (NSDQ: AAPL) demonstrating that there is almost as big of a market for the iPod Touch as there is for the iPhone, it’s no wonder that Dell is considering crafting a pocket-sized device that will connect to the internet (but won’t be capable of making calls).

The WSJ reports today that Dell engineers are working on building a gadget that would run on Google’s Android operating system, and would be slightly bigger than an iPhone. But the device would not be a cellphone, according to people who said they saw early prototypes. Android is likely an attractive platform because it is free, and has an application store similar to the iPhone.

Another person told the WSJ that Dell may begin selling the device as early as the second half of this year, although it could be scrapped entirely or be hit with delays. A Dell spokesman declined to comment on any plans for the product category.

Sources also said Dell began developing the device last year, after the company decided not to compete with Apple’s iPod. Those engineers were then assigned to help develop the small mobile device. Earlier this year, Dell appointed Ain McKendrick to be in charge of mobile Internet devices at the company, and another engineer has been in charge of customizing Android software for the device.

Previously, it was reported that Dell was rejected by wireless carriers, who didn’t think their smartphone efforts were special enough to differentiate themselves in the already crowded handset market. In March, Dell apparently was showing off two prototypes

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