Analyst Opinion – Some companies are gluttons for punishment. Dell, apparently, is one of them.
In what must be the worst kept secret in tech, Dell confirmed this week that it’s getting back into the mobile space. The company said it is working with China Mobile to bring a mobile product to market. Precisely what that mobile product is remains to be seen, but reports of a Google Android-based smartphone seem to be the most plausible.
If history means anything here – and I believe it does – things won’t go well for Dell. The company’s first foray into pocketable devices ended with a whimper when the Axim PDAs, introduced in 2002, were quietly discontinued two years ago. In deciding to exit the market, Dell joined a number of other PC vendors, including HP and IBM, that tried and failed to gain traction in a market so brutally competitive it makes the conventional PC sector look tame in comparison.
Sure, Axims were disconnected PDAs and not smartphones. And the supposed new devices will target China’s largest carrier and not a global smartphone market that’s dominated by RIM’s BlackBerry, Apple’s iPhone and preparing for an onslaught of new, open source offerings from vendors like Google and Nokia. But the culture that doomed the Axims to junk drawers everywhere – namely one steeped in PCs that saw mobile devices as tangential to Dell’s core business – hasn’t changed a whole lot over the past couple of years. If PC companies could easily apply their economies of scale to mobile devices, RIM wouldn’t exist and Apple would still be the Mac company.
Is this move good for Dell? Sure. Targeting China represents a low risk launch strategy that minimizes potential damage to the brand in case the new devices fail to catch on. Dell’s Chinese mobile adventure lets it figure out what works and what doesn’t in a market that hasn’t formed the same depth of brand loyalty and identification that already defines consumer and business buying patterns in North America and Europe. If it fails in China, Dell closes up its mobile shop there and continues business as usual in the West. If Dell becomes a mobile powerhouse in the Far East, the business case for a global launch becomes easy to make.
But does the world really need another me-too smartphone vendor? I’m inclined to say no. This is a market that rewards innovators and all but ignores followers. RIM’s BlackBerry defined the category and established an early beachhead in delivering robust, on-the-go data services. More recently, Apple’s iPhone rewrote the rules on multifunction/single-device integration and justifiably catapulted the company into a leadership position. Everyone else is feasting on the smartphone leftovers.
Dell may yet successfully carve out enough of a niche to make more of an impact than it did last time. But if a company the size and scale of Dell isn’t swinging for the fences and forcing us to re-assess what a handheld device can – and should – do, why should the rest of us even care, much less buy in?
Carmi Levy is a Canadian technology analyst and journalist covered with scars from his years leading IT help desks and managing software development projects for big bad insurance companies. He comments extensively in a wide range of media, and works closely with clients to help them leverage technology and social media tools and processes to drive their business.