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An evolving Dell rumored to enter smartphone market

post #1 of 27
Thread Starter 
An equity research note discussing a possible Dell bid for cell phone market share is the latest sign of a company shifting its strategy to better compete against Apple and others.

Kaufman Brothers' Shaw Wu suggested an announcement could come as soon as 3GSM or the Mobile World Congress event in Barcelona in mid-February.Â* He wrote, "From our supply chain checks, Dell has been studying the cell phone market and talking with component suppliers and manufacturers for nearly two years now."

(AÂ*quick search confirms this, with stories going back to February 2007 and even a mention of Dell planning a cell phone in 2005.)

Wu cited his sources as saying a launch is now "closer to reality than before" and that he sees the PC maker entering the cell phone market as "inevitable." The analyst also noted that Dell's president of consumer business Ron Garriques joined the company in early 2007 after gaining "considerable cell phone expertise" with Motorola.

According to Wu, the smartphone market is still in the early stages of adoption, comprised of "approximately 13% global penetration in the overall 1.1 billion unit cell phone market."Â* Apple iPhone and RIM BlackBerry are a clear No. 1 and No 2, but Dell could compete for the No. 3 spot against HTC, Nokia, Samsung, LG, Motorola, Sony Ericsson, Hewlett-Packard, Palm and iMate.

Wu believes Dell should consider acquiring a software maker and develop its own operating system to better stand out from a large segment of the market all running either Windows Mobile, Symbian, or Android. Â*Palm, of course, recentlyÂ*announcedÂ*its new webOS.

This would be a break from the past when Dell's Axim was a line of Windows Mobile-powered Pocket PC personal data assistants, discontinued in April 2007.Â* Another Dell smaller form factor hardware device, the Dell DJ music player, was shelved in 2006.

"[Dell] is in the midst of an identity crisis and needs to figure out what it wants to be and where it wants to go," Wu advised his clients.

Recent product announcements and rumors would seem to indicate Dell is trying mirror some of the steps taken by Apple, which has long ignored the low-end of the notebook market in favor of high-quality machines at matching prices.Â* While Dell still sells budget notebooks, its new Adamo line is a clear attempt to enter the "luxury" realm in which Apple has enjoyed success with its MacBook Pro and MacBook Air.Â* It's also an acknowledged attempt from the Austin-based systems builder to increase its emphasis on attractive design.

The Dell Adamo | Image compliments of Engadget.

While hinting at the Adamo this past December, Dell consumer sales and marketing VP Michael Tatelman was quoted, saying, "I think we need to get some iconic products out there, so people associate Dell's brand with other things."

Tatelman elaborated this week, telling attendees at CES that "Alienware is [Dell's] top performance brand, Adamo is our top design brand."

Commentary

There's been a clear shift in Dell's product lineup from mostly nondescript gray machines, occasionally with a touch of blue or two, to colorful and even user-customizable designs in the Studio line, which Dell touts on its website as "highly personalized - inside and out."Â* Meanwhile, of course, Apple's designs are arguably its most recognizable trademark outside of the iconic piece of bitten fruit.



And while both companies could claim a similar story -- leading computer manufacturer boldly introduces new cell phone -- Dell is in a much different position than Apple was in 2007.Â* Apple's identity crisis was staged and fought over a decade ago, having been led from rock bottom by the return of co-founder Steve Jobs, who also brought years of experience in building and maintaining the NeXT operating system to the iPhone drawing board.Â*For its part, Dell remains largely dependent on Microsoft Windows and has recently enjoyed only mixed success at best in the non-computer hardware markets it has entered. Â*Meanwhile, it's facing fierce competition against other Windows PC makers, but it hasÂ*reboundedÂ*somewhat in response to HP's theft of the U.S. sales crown.

Ultimately, Dell must recognize and improve upon what its competitors have already brought to market, Wu argues, noting that time may be limited in a quickly crowding cell phone market where success thrives largely off of innovation.

"Perhaps the tough macroeconomic environment buys the company some time, but we believe Dell needs to send a stronger message to its customers and investors by taking bigger and bolder steps than it has done so far," he said. "Entering the cell phone market could be the catalyst, but we believe it needs to be careful in its strategy as the cell phone market is similar to the PC market where most devices are low margin commodities and the winners are vendors with very differentiated products."
post #2 of 27
hey guys, in the title, you forgot the letter 'R' in the word "revolving'.
post #3 of 27
With its long and deep rooted history of hardware innovation and style, coupled with an outstanding software offering I predict that DELL will excel in the Smartphone market.
post #4 of 27
"This would be a break from the past when Dell's Axim was a line of Windows Mobile-powered Pocket PC personal data assistants, discontinued in April 2007.* Another Dell smaller form factor hardware device, the Dell DJ music player, was shelved in 2006."

With success like that why wouldn't you try the smart phone market?!?!
post #5 of 27
Cool! I've been waiting for a reason to finally upgrade me Dell Jukebox!
post #6 of 27
Wow, look at the lovely gloss on the screen.

Oh wait, you can't even see the screen through all the glare! ;-)

At least Apple wouldn't do something like that. Oh wait! ....
No Matte == No Sale :-(
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No Matte == No Sale :-(
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post #7 of 27
It's hard to imagine Dell being able to pull a competitive advantage off on this one:
  • Dell is extremely US-Centric
  • US Competition to Dell is significant
  • Dell has had little success in "consumer electronics" beyond PCs
  • Dell has no real software engineering team.
  • Dell has no relationship with the telcos.

Dell's best shot would be to try and brand an existing product, but even then how would they compete? Even HP can't really pull off a cell phone, and they have had other successes in the market!
post #8 of 27
These droning, petty, cynical comments are getting old.. You people should embrace competition.
post #9 of 27
I agree with Wu.

Dell's management, and it's product lines are all seriously confused right now. It's hard enough to launch a product when the company is doing well and everything is snappy and ship-shape. Launching a whole new product category that they have no experience in, while being in a confused and stressed state is just not likely to come out well.

I'd like to see them buy Palm, but only because I think it would be a poison pill.
In Windows, a window can be a document, it can be an application, or it can be a window that contains other documents or applications. Theres just no consistency. Its just a big grab bag of monkey...
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In Windows, a window can be a document, it can be an application, or it can be a window that contains other documents or applications. Theres just no consistency. Its just a big grab bag of monkey...
Reply
post #10 of 27
Quote:
Originally Posted by bigmc6000 View Post

"This would be a break from the past when Dell's Axim was a line of Windows Mobile-powered Pocket PC personal data assistants, discontinued in April 2007.* Another Dell smaller form factor hardware device, the Dell DJ music player, was shelved in 2006."

With success like that why wouldn't you try the smart phone market?!?!


Maybe they have a lot of empty shelves to fill?
post #11 of 27
Quote:
Originally Posted by Boogerman2000 View Post

These droning, petty, cynical comments are getting old.. You people should embrace competition.

What competition?
post #12 of 27
Quote:
Originally Posted by Fast Fred 1 View Post

What competition?

hehe
post #13 of 27
Quote:
Originally Posted by Blah64 View Post

Wow, look at the lovely gloss on the screen.

Oh wait, you can't even see the screen through all the glare! ;-)

At least Apple wouldn't do something like that. Oh wait! ....

Good thing Apple kept the matte option available for the new 17" MacBook Pro, or otherwise people like you might hijack threads. Oh wait! ....
When a company stops chasing profit and start chasing the betterment of their products, services, workforce, and customers, that will be the most valuable company in the world.
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When a company stops chasing profit and start chasing the betterment of their products, services, workforce, and customers, that will be the most valuable company in the world.
Reply
post #14 of 27
Dell competing with Apple. I don't think so. That would be about like Schwinn taking on BMW. Very predictable results.
post #15 of 27
Quote:
"I think we need to get some iconic products out there, so people associate Dell's brand with other things."

Instead of associating Dell with piss, it's now associated with sh!t?

Quote:
Originally Posted by aaarrrgggh View Post

It's hard to imagine Dell being able to pull a competitive advantage off on this one:
  • Dell is extremely US-Centric
  • US Competition to Dell is significant
  • Dell has had little success in "consumer electronics" beyond PCs
  • Dell has no real software engineering team.
  • Dell has no relationship with the telcos.

Dell's best shot would be to try and brand an existing product, but even then how would they compete? Even HP can't really pull off a cell phone, and they have had other successes in the market!

Wait, did HP try to make a phone, or are you just saying they couldn't if they wanted to?
post #16 of 27
Let's not be so hasty to dismiss this. If Dell follows the same four rules for success they've applied to all of their products, that they:

1) make the product larger and clumsier by their very nature;
2) make the item cheaply (read: as cheap as you can get it, so it looks cheap);
3) shirk basic principles of good design and go dull, even sophomoric and third-rate;
4) advertise it with something that 1.00% of the population thinks is really cool, but is really nerdy (like a giant blue robot guided by a blue laptop wielding geek);

this will be yet another gigantic, smashing success from Dell.
post #17 of 27
I wonder if it'll be similar to Dell's DJ line of MP3 players.

When Dell enters the market, they make a splash--and then drown.
post #18 of 27
Quote:
Originally Posted by Boogerman2000 View Post

These droning, petty, cynical comments are getting old.. You people should embrace competition.

Why should we embrace weak competition?
post #19 of 27
Dell's got a great track record on this sort of thing...


Dell's Axim... a PDA... FAIL!

Dell's DJ... an iPod knockoff... FAIL!

May as well go for 0-3, Dell.
post #20 of 27
Dell Ditty. At one point, they were calling their MP3 player "Ditty". Do the people that work in Dell marketing come from some kind of baby-verse?

They can call their phone the Ring-a-ding-ding.
They spoke of the sayings and doings of their commander, the grand duke, and told stories of his kindness and irascibility.
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They spoke of the sayings and doings of their commander, the grand duke, and told stories of his kindness and irascibility.
Reply
post #21 of 27
Quote:
Originally Posted by AppleInsider View Post

While hinting at the Adamo this past December, Dell consumer sales and marketing VP Michael Tatelman was quoted, saying, "I think we need to get some iconic products out there, so people associate Dell's brand with other things."][/url][/c]

'associate Dell's brand with other things'

Other than crap customer service?!?!

The only time you get to speak to someone who has the grasp of the English language is when you want to buy something otherwise you would had better get up to scratch on your Urdu.
post #22 of 27
Quote:
Originally Posted by vandil View Post

Dell's got a great track record on this sort of thing...

Dell's Axim... a PDA... FAIL!

Dell's DJ... an iPod knockoff... FAIL!

May as well go for 0-3, Dell.

Dell's DJs did fail, but none of them were iPod knockoffs.
post #23 of 27
Quote:
Originally Posted by JeffDM View Post

Instead of associating Dell with piss, it's now associated with sh!t?

Dell back under Michael Dell isn't the charlie foxtrot it was under Kevin Rollins. The Studio and XPS lines are very good computers from what I have seen. Like Windows 7, it will be to Apple's detriment to arrogantly dismiss this company.

Quote:
Originally Posted by Adjei View Post

Why should we embrace weak competition?

Might want to try one. There is a huge difference between the cheap plastic inspirons and the studio/XPS models. The only thing that the Mini has over the Studio Hybrid (BTW, this is what happens when you don't update your products) is the operating system. The system seems very well made, is design to be user accessible, and options to mount either on its side or bottom, and the front USB/headphone ports and card reader have been very useful.
post #24 of 27
I hope it doesn't run WinMo, we need more diversity in the smartphone market.

iPod nano 5th Gen 8GB Orange, iPad 3rd Gen WiFi 32GB White
MacBook Pro 15" Core i7 2.66GHz 8GB RAM 120GB Intel 320M
Mac mini Core 2 Duo 2.4GHz 8GB RAM, iPhone 5 32GB Black

Reply

iPod nano 5th Gen 8GB Orange, iPad 3rd Gen WiFi 32GB White
MacBook Pro 15" Core i7 2.66GHz 8GB RAM 120GB Intel 320M
Mac mini Core 2 Duo 2.4GHz 8GB RAM, iPhone 5 32GB Black

Reply
post #25 of 27
Quote:
Originally Posted by Aizmov View Post

I hope it doesn't run WinMo, we need more diversity in the smartphone market.

I believe the rumors hint at android.
post #26 of 27
Dell can't even match the iPod after 8 years on market. How are they going to even get a stone's throw from the iPhone?

Just laughable.

Thompson
post #27 of 27
Quote:
Originally Posted by thompr View Post

Dell can't even match the iPod after 8 years on market. How are they going to even get a stone's throw from the iPhone?

Just laughable.

Thompson

Why would they try to match the iPod? That battle had already been won, there was no money there.
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