Dell Inc, the worlds No.2 PC maker, is developing a pocket-sized device for tapping into the Internet, the Wall Street Journal said citing people familiar with the company's plans.

The gadget would run on Google Inc's Android software, the people told the paper.

According to the paper, two people who saw early prototypes described the device as slightly larger than Apple Inc's iPod Touch, which is similar to the iPhone but does not have cellphone capabilities.

Another person who was briefed on the company's plans told the paper that Dell may begin selling the device later this year, though this person said the plan could be delayed or scrapped entirely.

A Dell spokesman declined to comment to the paper on any plans for the product category.

Dell may use chips based on designed licensed from ARM Holdings PLC, people familiar with the company's plans told the paper.

Dell could not be immediately reached for a comment by Reuters.

(Reporting by Chakradhar Adusumilli in Bangalore; Editing by Jon Loades-Carter)