Despite a rash of reports to the contrary, Dell isn't necessarily about to take a long rumored step into the smartphone market any time soon, and here are five reasons why.

Evidently, Dell's been internally eyeing the mobile phone space since at least 2005, when an article in CNET cited a company roadmap as indicating plans to debut a smartphone by mid-2006. Although that didn't happen -- and no phones have emerged for Dell since then -- the phone specter has arisen around Dell again in multiple places over the past couple of weeks.

In mid-January, for instance, Apple Insider quoted an analyst at Kaufman Bros. as predicting that a cell phone from Dell is "closer to reality than before" and even "inevitable" at some point.

"From supply chain checks, Dell has been studying the cell phone market and talking with component suppliers and manufacturers for nearly two years now," according to Shaw Wu. He also pointed out that Ron Garriques, Dell's president of consumer business, arrived at Dell in 2007 after attaining "considerable cell phone experience" at Motorola.

A story in The Wall Street Journal on January 30 got even more specific, stating that John Thode, another Dell hire from Motorola, now heads up a group of Dell engineers who've been "working on phones" in the Chicago area.

Then Electronista last week referenced an article in an unnamed UK magazine which purportedly claimed that Dell will unveil an Android smartphone at the Mobile World Congress (MWC) in mid-February. Electronista also quoted Anne Camden, Dell's senior PR manager, as denying that Dell will either attend MWC or unveil any type of product there. But Camden withheld comment on whether Dell will enter the market at some time in the future, according to the blog.

Camden has been on vacation and unavailable for comment, and when reached by Betanews on Friday, Bob Kaufman, another Dell spokesperson, said he hadn't seen the Electronista piece. He then declined comment on the WSJ article, saying, "We don't comment on rumor and speculation, and that's what [the WSJ story] is."

Indeed, a look at the list of exhibitors on the MWC's Web site shows no mention of Dell, although Acer -- a company that has openly acknowledged smartphone plans for Barcelona -- is slated to be on hand at Stand CY07 in the Courtyard.

Dell executives undoubtedly feel pressured right now to finally come out with a smartphone product. But despite Dell's long-time development activities, now might not be the best time for a product announcement, for at least five reasons.

1. The smartphone market is really slumping. As previously reported in Betanews, a new study by ABI Research shows that while smartphones sailed along during the first half of 2008 at a 14 percent year-over-year (YoY) growth clip, growth fell to 8% in the third quarter and actually dropped by 10% in the fourth quarter.

"The smartphone market, which earlier seemed to be relatively immune to flattening demand in the broader handheld space, is finally being affected by the economic downturn," observed Carmi Levy, senior VP at AR Communications and a frequent Betanews contributor.

2. Competition is still rising. With plans for an Android phone already under way, T-Mobile launched its G1 phone in October anyhow, even after the financial crisis hit. Palm followed in January with the Pre, a phone that will run on Sprint's 3G network.

If Dell were to go ahead with a smartphone this year, however, the Android platform could make the most sense. Samsung and struggling Motorola have both been expected to roll out phones for Google's platform, but neither has done so yet, leaving HTC practically unchallenged so far.

3. Dell lacks enough experience outside of its PC stronghold. "Dell has tried and failed before to be a consumer products company. Its Axim line of PDAs didn't exactly light the world on fire, and was quietly discontinued," noted Levy.

"If the PC landscape is a shark-infested ocean, the smartphone space is just like that, only with the temperature turned way up. Just because you've built a solid business selling conventional computers does not mean you'll pull off the same feat selling smaller devices," according to the analyst.

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4. The right retail channels and carrier relationships aren't yet in place for a Dell smartphone. Meanwhile, outside of AT&T and international wireless carriers, Apple's iPhone -- also launched last year -- is now for sale at Walmart, too. The G1 can also be found at Walmart stores, as well. Acer seems to have laid down great groundwork for a smartphone launch through its $99 promotion for the Aspire One netbook in mid-December with Radio Shack.

5. Dell still has other fish to fry. Dell's share price has dropped about 30% over the past two years, following the basic trend outlined by the NASDAQ composite index -- falling 41% in the same period. Hewlett-Packard has continued to extend its lead in the global PC market over number two Dell, and Acer -- now in third place worldwide -- has been catching up to Dell on the PC side at a rapid clip.