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Well, you know that we’ve been yearning for a phone offering from Dell for ages. There has been rumblings all the way back to the X5 Days. We never saw that X7 that was rumored to be the “phone” version of the Dell Axim series. Anyhow, Barrons is reporting that carriers have turned Dell down…

He asserts that Dell showed a prototype to the carriers, but that they weren’t all that impressed. “From our conversation with supply chain and industry sources, it appears that it ultimately came down to lack of carrier interest and small subsidies, making it difficult for Dell to make a profit,” he write. “In our view, the last thing Dell needs is to enter another money losing business as it seeks to preserve its operating margins of 5%-6%.” (Which he notes compares to Hewlett-Packard at around 11%, and Apple and IBM at 15%.)

Wu says that he understands that Dell built prototypes using both Windows Mobile and Android, but that the carriers knocked the offerings for “lack of differentiation” versus current and coming products from HTC, Samsung, LG, Nokia, Motorola and others. He adds that the unveiling of the Palm Pre didn’t help, “generating interest from carriers as a viable competitor.”

Ouch, that hurts. Right? Well, on down in the article, they mention that they believe that Dell will not quit on the idea of getting into the phone space. I welcome this personally. How about you? Do you think Dell can get in there and do something good?