Wu speculates that the move would be to offset the impact smartphones are having on notebook sales.
But the analyst warns that Dell would have to make its device truly distinctive to stand any chance of securing a healthy slice of the extremely competitive smartphone market.
For this reason, Wu suggests Dell would be well advised to consider acquiring a software maker.
The comments come after investigations within Dell’s supply chain reportedly indicate that lengthy discussions with potential component suppliers are reaching fruition.
While details such as device specifications and a launch date are unknown, some reports suggest Dell is planning a handset launch as early as next month at 3GSM or the Mobile World Congress.
Dell has publicly tried to play down rumors of it launching a phone but has stopped short of openly denying the claims.