Big News For Dell: Its Devices Will Be Used By Baidu In Mobile Assault

Baidu’s determination to get a piece of the action in China’s fast-growing mobile market has yielded plans for an app store and mobile platform of its own, Baidu Yi, based on Android; and now we are getting more details on the second part of the equation: the devices.

The company is reportedly working with PC giant Dell to develop tablets and smartphones that will run Baidu’ services — a deal that Dell hopes will give it a leg up in the country’s booming mobile market — a space where it has stumbled in its own home market of the U.S.

From the looks of it, the partnership sounds like a new lease on mobile life for Dell: the report, in Reuters, quotes a Dell spokesperson, who says that one of the first products Dell will develop for Baidu (NSDQ: BIDU) will be based on the Streak 5 — which will be customized to run Baidu’s new mobile apps platform, the Android-based Baidu Yi (screen shots, pictured).

The Streak 5 was Dell’s Android tablet with a five-inch screen that sold poorly in the U.S. and was finally discontinued last month.

The partnership indeed could also be a big boost for Dell in its strategy to do more in China. The company already has a big retail presence there — with 10,000 sales points — and it is vying against local player Lenovo as well as Apple (NSDQ: AAPL) for more brand domination. According to SinoPac Securities analyst Hanna Chang, “All PC brands are trying to differentiate themselves from each other in the mobile space, and Dell’s tie-up with Baidu may give it first-mover advantage in the China market.”

But Dell will not be the only partner for Baidu, which says that it is working with two other handset makers as part of its Yi strategy. Baidu currently controls 80 percent of China’s online search market — a position it very much wants to extend to mobile platforms.

One other potential partner, for example, could be Huawei: a company that makes white-label, Android-based devices for operators in other countries (such as Vodafone). Huawei recently revealed new smartphones, based on Android, that link up with Huawei’s new Cloud+ storage service.

One of Baidu’s main rivals in China, Sina (NSDQ: SINA), recently announced a “Weibo phone” in partnership with HTC. The device is based on the Facebook-optimized HTC Salsa, with the hotkey instead linking to Sina’s Weibo social network.

Mobile is a huge opportunity in China: it still has relatively low PC and fixed broadband penetration, yet has a population with a huge appetite for technology and the Internet.