Computer companies are looking to extend their reach into as many related markets as possible in the current difficult economy. Apple was able to jump into the smartphone market with its iPhone and ultimately had one of the most successful devices to ever hit the high-end smartphone category.

Rumors have been flying around claiming that Dell was looking to get into the smartphone or MID market. In late January, many expected Dell to unveil its smartphone at the GSMA Mobile World Congress, but those plans never materialized.

Michael Dell, CEO of Dell Computer, announced at a presentation in Japan that Dell was working on a smartphone or MID. EWeek reports that this is the first official confirmation to come from either Michael Dell or Dell corporate confirming the company was in fact working on a smaller form factor device.

Dell said at the presentation, "It is true that we are exploring smaller-screen devices. We don't have any announcements to share today, but stay tuned as when we have new news we will share that with you."

Kaufman Brothers research analyst Shaw Wu wrote earlier this month in a research note that conversations with industry insiders revealed that Dell had been making efforts in the smartphone category, but had failed to gain any carrier interest according to eWeek. Wu wrote, "The feedback was lack of differentiation vs. current and upcoming products."

According to Wu, Dell was showing prototype devices to carriers that were running both Windows Mobile and Google Android. Michael Dell pointed out that his namesake company had been integrating 3G modems into its laptops for the last three years and has agreements in place with many mobile carriers.

Dell said, "We already have agreements with many mobile carriers around netbook devices, so it wouldn't be unreasonable to expect that we would have smaller mobile Internet devices or smartphones in the future."