Dell could start making phones

Summary:Market experts say the signing of a Motorola executive may lead to a launch in the mobile arena

Dell will have to enter the mobile phone market in order to keep up with rivals such as HP and Apple, a US analyst has claimed.

Wireless market analyst Jack Gold, of J Gold Associates, also suggested that this might best be achieved by buying an "established player" such as Palm and jettisoning "the non-strategic components of Palm's business".

Gold's predictions are centred around Ron Garriques, the former Motorola handset boss lured to Dell less than two weeks ago to run its consumer division. "Garriques… brings another unique capability which we believe Dell is on the verge of utilising. He has extensive wireless experience, an area [where] Dell will have to become a player — and soon — as HP and Apple push into this key market segment," wrote Gold on Monday.

According to Gold's analysis, Dell would stop selling standalone PDAs — a fast-dying market — "within the year", concentrating instead on "offering a smartphone device that has all of the features both business and high-end consumers would want (eg push email, office document viewing/editing, media capability)".

"We believe Dell will aim at both consumers and enterprises with slightly modified and/or differentiated products, but we expect the products to be Windows Mobile-powered, maintaining the relationship Dell currently has with Microsoft for its handhelds," the brief continued. "But to be successful, it will require not only good products, but also partnerships with carriers that will power these devices — another area in which Garriques has extensive experience, and where the existing Dell organisation has virtually none."

Dell itself refused to comment on "rumour, speculation and/or future roadmaps", but other analysts thought Gold's theory made sense. "Fundamentally, the barriers to creating a Windows-based smartphone aren't that high," Disruptive Analysis' Dean Bubley told ZDNet UK on Tuesday, adding: "It's not as though Dell lacks the resources".

Bubley also suggested that Dell would be a welcome entrant to the enterprise smartphone market, as competitors such as HTC and iMate lack an enterprise salesforce and "aren't especially enterprise-friendly". However, he expressed scepticism over the idea that Dell might cosy up to operators, pointing out that the company is "not historically used to selling through the carrier channel" and describing such an idea as a "complete shift" away from Dell's traditional direct sales model.

"If you have a channel for smartphones, could you justify not having a channel for laptops?" asked Bubley, suggesting instead that Dell might be the right manufacturer to establish a "large-scale non-operator channel".

"Given that a lot of the enterprise [fixed-mobile convergence] offerings are going to be fairly anti-operator, in so far as they save enterprises money, it makes sense to have phones at a price point that is not dependent on operators," said Bubley, complaining that other manufacturers "seem to be a bit more hesitant for risk of killing the golden goose".

Gold disagreed, telling ZDNet UK on Wednesday: "If you want to play in wireless, then working or partnering with the carriers is unavoidable. It's all well and good to want to sell direct, but if your device has not been tested on the carrier's network, they won't allow it to operate. Yes, you can plug in a SIM card, but if it's not an approved device, the carrier could easily just turn it off. As much as we hate to think the carriers have such power, in reality they do."

Gold added: "Even Apple, which plans to market direct to end users, has a carrier partner [AT&T/Cingular in the US] that has tested and endorsed the product. So I don't think Dell will have a choice but to work with carriers, even though it will most certainly sell devices direct to enterprises."

Topics: Networking

About

David Meyer is a freelance technology journalist. He fell into journalism when he realised his musical career wouldn't be paying many bills. His early journalistic career was spent in general news, working behind the scenes for BBC radio and on-air as a newsreader for independent stations. David's main focus is on communications, of both... Full Bio

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