Dell Mulling SmartDumbphone?
Dell, the second-rate PC company, may soon become a second-rate handset company as well. Anonymous sources tell The Wall Street Journal that the company has developed prototype smartphones that work on Windows Mobile and Google’s (GOOG) Android operating system. The first is said to boast a touchscreen similar to Apple’s (AAPL) iPhone, the other a slide-out QWERTY keypad like the Palm Pre, both intended to compete in the segment dominated by the iPhone and BlackBerry devices. According to the Journal, Dell (DELL) may uncrate one or the other, or both, as early as February, assuming it doesn’t abandon them entirely–which is also said to be a possibility. A few other details:
- The noncompete clause that prevents Ron Garriques, the former Motorola (MOT) executive heading up Dell’s consumer-products efforts, from working on mobile phones expires next month.
- If Dell does debut a phone or two, the introductions won’t take place at next month’s Mobile World Congress show; the company has announced that it’s not attending the show, much less introducing new phones there.
- Other reports name the alleged device as the (wince) “MePhone,” which is about the worst name I can think of, though it’s entirely appropriate for Dell.
- The Journal report comes on the heels of Kaufman Brothers analyst Shaw Wu’s claims that Dell has been making preparations for a cellphone for some time now. “From our supply chain checks, Dell has been studying the cellphone market and talking with component suppliers and manufacturers for nearly two years now,” Wu wrote earlier this month. “The exact timing of Dell’s launch is not clear but our sources indicate it is closer to reality than before. We believe it is likely inevitable that Dell enter the cellphone space given the cannibalization of PCs by smartphones and highly functional mobile devices.”
- If Dell does enter the smartphone space, it will likely be with far less elegance and grace than it would have if the company had bought Palm (PALM) when it had the chance. From RealMoney.com contributor Bob Faulkner’s open letter to Michael Dell:
With the advent of the Apple iPhone in 2007 and its subsequent imitators, it has become apparent that we’re seeing “computing” evolve once again. Phones are no longer just something you speak into. They have transformed into a portal for taking the Internet wherever you go.
I realize that you have been busy the last couple of years trying to right the good ship Dell, but your lack of participation in this market segment will hurt the company going forward. There is another rumor making the rounds that you’ve been feeling out suppliers in an attempt to enter the market at some point. While, if this is true, I’m glad to see some movement on this front, I fear that this approach is doomed to fail.
Let me be so bold as to suggest that there is a ready-made solution for you that I recommended nearly two years ago: Dell should buy Palm. Think about it, Michael–it’s a match made in heaven. You get a solution, and they get the stability, influence and purchasing power of Dell.