According to the WSJ, Dell engineers are hard at work on an Android powered device that’s pocket-sized with the ability to tap into the Internet. Multiple sources (two to be exact) have seen early prototypes of the purported Android device and say that it’s “slightly larger” than the iPod Touch. Another source for the WSJ on this story says the device could be out in the second half of 2009. The same source goes on to say that the device could be delayed or scrapped. Other notable tidbits include the use of an ARM-based chip for the device. Dell is looking to sell through cellular carrier channels, says another source, which means this could be an actual phone or a netbook.