January 28, 2002 4:15 PM PST

CFO: Dell briefly dabbled in handhelds

Dell Computer has often publicly downplayed any interest in handhelds, but the company briefly maintained an internal group to come up with such products before deciding to redouble its efforts on PCs.

Sources have said that Dell formed a group more than a year ago to develop handheld computers, tablet computers and other consumer-related devices. On Monday, a Dell executive confirmed that a handheld group did exist.

That group was eliminated in early 2001, along with a fledgling Internet group, when Dell tightened its belt and refocused its efforts on strengthening its market position against rivals such as Compaq Computer, sources have said.

Close to the same time, Round Rock, Texas-based Dell also began the first layoffs in company history.

Dell has in the past declined to comment on the existence of any internal efforts to move into handhelds. But James Schneider, Dell's chief financial officer, acknowledged Monday that the company did create a group focusing on handhelds.

"We had a small business group that looked at it. At the time, we weren't convinced there was big enough profit pool in it," he said during a question-and-answer period at the Banc of America Securities Conference in San Francisco. "If we don't see that something will be profitable pretty quickly, we won't move into it. If we think there is a big enough profit pool and enough standardization, then we are interested."

Dell tends to be one of the more secretive of the tech giants. The company, for instance, made almost no mention of its services divisions or venture capital efforts until both projects were well under way. Executive changes and company reorganizations are also not often announced publicly. The company has declined to comment on the now-defunct Internet division, which sources say was charged with creating online portals, such as one for gaming.

The company sells handhelds from Palm, Sony, Hewlett-Packard and Research in Motion, among others, through its Web site, but it has never marketed a handheld under its own brand name.

News.com's Michael Kanellos contributed to this report.

 

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