More apathy for a Dell smartphone
It's hard to tell if anyone is as enthused about the possibilities of Dell making a smartphone as Michael Dell.
He's been making periodic references to his company making "small screen" devices in the near future at public appearances for the last year. But the people who watch his stock and analyze his company's every move, appear incredibly underwhelmed by the idea of a Dell handset. Their apathy is notable since a) Dell's last handheld device was very popular with consumers and b) Dell hasn't formally announced anything specific.
While getting into the smartphone-making business is not a terrible idea, seeing as how the PC market is pretty pitiful right now and smartphone sales are soaring, how Dell goes about manufacturing, selling, and marketing such a device is important. Even the slightest misstep could undo the progress the company has made in turning around its business.
Again, Dell has not made any official announcement of a specific product. But the frequency or rumors about such a device is increasing. The latest appraisal came Tuesday from Bernstein Research analyst Toni Sacconaghi Jr., who said that while there's potential for Dell to make some decent profits from a good handset--which could arrive "in the next six months"--he's not convinced Dell's execution will be all that graceful.
The company's track record in making devices other than PCs is "uninspiring," he wrote in a research note. "From an investment perspective, we do not believe it is appropriate to give Dell any credit (nor deduct any value) for its smartphone business. We'd rather take a wait-and-see approach."
In other words, Dell investors aren't ready to toast Michael Dell's smartphone just yet. There are plenty of reasons for them to be skeptical, chief among them being the company's ongoing restructuring and realignment of its core business. Sacconaghi points out that the smartphone business could be a "distraction" from the company's larger goal of improving its costs and establishing itself as a global PC brand and supplier of enterprise hardware and services.
But there's also the possibility that the phone will be just fine. Not a standout in its category along the lines of the iPhone, BlackBerry, or G1, but something that is based on brand name recognition could sell well in markets the company is targeting heavily right now: India and China. No matter what, it's really important for Dell to make decent margins. If it does manage to do that while snagging a small slice of the mobile handset market, something akin to what HTC has right now, it could result in decent revenue--Sacconaghi throws out the figure of $4.5 billion for fiscal year 2010.
There are rumors, however, that what Dell has come up with so far is not very exciting. Ashok Kumar, an analyst with Collins Stewart, panned the handset earlier this month--without seeing it, mind you--but based on feedback he heard from wireless carriers.
"The carriers, who see products from all the leading handset vendors, have decided to pass on Dell's handset," he said. "Some carriers are citing a noncompelling product with a road map that lags competition."
And a few weeks before that, Shaw Wu, an analyst at Kaufman Bros., also said in a research note that Dell showed devices running Android and Windows Mobile to carriers who were ultimately uninterested in the product.
Despite all the negative feedback on a product that isn't even official, it's actually not a terrible idea for the company to try this. Because, here's the thing: the PC industry isn't what it used to be. During the first quarter of 2009, the industry saw a 7.1 percent decline in shipments from a year ago, to 63.5 million units, according to IDC. Every major vendor is struggling to sell what are increasingly similar devices that bring in very thin profits. Though companies like Hewlett-Packard are making it look easy to sell laptops, most of the company's strength comes from its services and printing businesses. So Dell getting into advanced handsets that offer Web access, e-mail, and GPS features, one of the faster growing consumer electronics categories--IDC says sales climbed 22.5 percent over the previous year at the end of 2008--could be, well, smart.
If it is trying to compete with the likes of Apple, Nokia, RIM, Palm, or even HTC, timing is key. By the time Dell releases this thing, whatever it may be, to make a decent impact in markets like the U.S., Japan, South Korea, and Europe, it would need to be a significant jump forward in what those guys are offering. Consumers aren't dumb and they're not just going to buy something because there's a Dell sticker on it, especially if it really is as far behind what's currently on the market as some are saying.
So what would would make you buy a Dell smartphone? Make sure to take our poll or let us know in the comments.
Erica Ogg is a CNET News reporter who covers Apple, HP, Dell, and other PC makers, as well as the consumer electronics industry. She's also one of the hosts of CNET News' Daily Podcast. In her non-work life, she's a history geek, a loyal Dodgers fan, and a mac-and-cheese connoisseur. E-mail Erica. 
Dell can't just chase every opportunity that "seems" to be lucrative, but focus on where it can excel which is in medium and low priced reliable PCs.
If Dell wants to branch out, Michael should get on his knees and beg Job's forgiveness for his 1997 comments regarding the value of Apple and see if he can work out a licensing deal for Netbooks from Apple.
I just want the Dell smartphone (w/Windows Mobile) to work like a Palm Pre & look more like an iPhone.
Microsoft has been in the smartphone market for 10 years. I have on in my pocket.
?The problem with Dell these days is that the brand has been damaged so anything they produce will be met with skepticism.? You have got to be kidding me. Dell has a very good reputation outside of ******* home user. Dell server are second to HP in running data centers.
Most servers sit on a rack in a room doing their job. Last I checked, a Dell server does it's job just as well as any other server. Innovation is pointless if few people actually need or want it.
Then you must not know anything about rackmount servers. I personally have not specfically used Dell's rack servers (used Sun, HP, IBM etc.) though and involved with designs of CPUs and systems that went into them). So if you think that there's little innovation in the rack space, you are grossly mistaken.
But from the PC space, Dell had little innovation than being a glorified white-box assembler. I own several Dell products including their Axim that I am a big fan of. It's a shame they closed that line.
I won't buy a single Dell product again and I will tweet, post, blog, comment, and shout from the mountaintops about how poorly they treated me - and we home and small business owners add up. I'd sure hate to be a stockholder too - I spent hours on the phone being passed from mean jerk to mean jerk just trying to get a new power supply - I'm sure the amount those guys get paid far outweighs the price of the part I needed.
As it says in the story, the cell phones might sell in China, where they probably don't expect decent tech support anyway. Bye bye, Dell.
I apologize for the poor choice of words. I do not work at dell or in tech support, but I have worked with many computer manufactures. All the computer manufactures suck, some just suck less than others. I would have to agree that Dell tech support has got to be the worst.
It is D phone to use in todays world. LOL
Oh Really! I didn't know that Dell has turned around its business. Do some more research and you will find that Dell has and continues to lose market share. That is not turning around its business.
If you buy your servers and desktops from Dell then I expect you would get an amazing deal on the phones as well. Free Microsoft smartphones for your people in the field with support for the device provided under the same support contract as the rest of your infrastructure. One number, one contract, less pain for the organisation.
Sounds compelling to me.
Intel, nVidia, and Broadcom make chips and components. Computer companies, such as Dell, Apple, Sony, HP, etc. put them together to make a whole computer. There is significant inhouse engineering and design work that goes into many Dell, Sony, Apple, or HP motherboards and systems. They are not all built with off the shelf parts.
iPhone component list not one damn Apple made part on it.
http://www.stockozone.com/2009/04/swine-flu-complete-list-of-winning-and.html
Dell was the badge on the HTC-developed Axims, and those were easily the best PDAs at the time. Fastest processor available running at 624Mhz, separate GPU, CF card and SD support, Wifi, Bluetooth, ActiveSync, replaceable battery, flashable ROM. Unmatched. In fact, if Dell *only* dropped in a cellular radio into an Axim 51v I'd buy it. Given that in six years tech has gotten better, chipsets integrating functions and shrinking, a minor refresh of the Axim would sell like crazy.
Here's the ultimate smartphone, based on a Dell Axim x51v with a resistive screen -- not touch, multitouch is bull at this form-factor and no logical argument exists to the contrary -- and WinMo, because corporate adoption is almost guaranteed if you support Microsoft's Office suite out-of-box:
-"Snapdragon" Qualcomm QSD8650
-1Gb of RAM
-WiFi b/g
-Bluetooth 3.0 with lots of profiles supported
-SDHC support
-CF card support : think VERY LARGE STORAGE
-removable battery, supporting large extended batteries
-cellular radio support, including 3G
I would probably not add a GPS radio unless they could manage it without killing a battery in thirty minutes; I'd lean on an SD card GPS or even a Bluetooth puck. Still, radio management is a tough problem to solve.
Build me that.
-Remo
They are basically a assembler.
I hate how innovate is thrown around so much eventually you run out of things to innovate on a product.
Its not like there is a endless supply of ideas that have not been done.
You innovate by changing the look and feel of the thing. Sure a computer is a computer. They all have practically the same chips and boards, but the look and feel is what sells. Like cars. They all have 4 wheels, an engine, transmission and a steering wheel, but they all don't work the same.
Actually the more you innovate, the better you get. You go back to things that you made that weren't ready for the public, and fix them so that they are. HP and Apple can do it, even Intel has a contest every year for innovating and features cool prototypes of computers that if they were built, they would be on par or even ahead of Apple's designs somewhat.
Dell is trying by changing the looks of their products with color, but that is so early 2000. They move too slow. Now they have talent by sniping a few key people from Apple. It's just a question whether or not they can pull it off before they go under
Dell has a loyalty base as well believe it or not. Some people like their products.
Then I would not be so bored when on the go.
I think their only chance would be to buy Palm.
They do have a very good option though:
They own Alienware who have managed to remain relatively independent and have retained their cool factor as a maker of high end gaming PCs and laptops.
Dell should use that brand to launch a slickly designed Android phone with enough oomph to run some decent games and make that their differentiator. They could use their famous supply chain clout to keep costs down, but they'd have to allow the Alienware guys to own the design.
I always liked the IBM laptops.
Thanks for that bit of insight. Insight that has absolutely nothing to do with the article at hand. Good job!
- by quantumuniverse May 2, 2009 3:13 AM PDT
- "As it says in the story, the cell phones might sell in China, where they probably don't expect decent tech support anyway. Bye bye, Dell."
- Like this Reply to this comment
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(36 Comments)yes, Dell would just love it. Sell some phones and don't even need to set up little support when all the info could be put online, and in the largest cell phone market in the world