The new Palm Pre may be the most-anticipated new phone since the iPhone 3G, but there’s yet another new player on the way: PC maker Dell may be readying its own smartphone, to arrive as early as next month.
Dell could make an announcement at 3GSM or the Mobile World Congress event in Barcelona in mid-February 2009, say some analysts.
"The exact timing of Dell’s launch is not clear but our sources indicate it is closer to reality than before," says Shaw Wu, an analyst with Kaufman Bros. in a research note. "We believe it is likely inevitable that Dell enter the cellphone space given the cannibalization of PCs by smartphones and highly functional mobile devices."
Dell has been studying the cellphone market and talking with component suppliers and manufacturers for nearly two years, says Wu.
A Dell smartphone, if it arrives, will be entering an incredibly competitive market. In the past year Apple, RIM and HTC among others have launched new touchscreen devices. And there’s more to come from other players, including Palm.
Dell is betting there will be enough room for all. Smartphones are one of
the fastest-growing consumer electronics devices. Smartphones captured
14 percent of the 2008 cellphone sales market with about 258 million devices sold last year and sales are expected to go up to 725 million this year.
Dell could be fighting for a piece of that pie. "It wouldn’t surprise me to see them do this," says Ryan Reith, an analyst with
IDC. "This is such an enticing space that if you do it correctly you
can be in a huge growth market."
Speculation about Dell’s move into the smartphone market has been around for a few years now. In 2007, Dell hired Ron Garriques, a former Motorola executive known as the force behind the RAZR phone, as president of its consumer business. "That’s what sparked all the chatter," says Reith.
But now Dell may be closer than ever to the finish line. "It’s been two years since Garriques was hired which leads me to believe that Dell could be ready with something outside the PC space," says Reith.
Dell did not respond to a request for comment.
Despite the availability of the open source Android operating system, Dell is likely to pick the Windows Mobile platform. Dell has a strong relationship with Microsoft, stemming from their close partnership in the PC business. Microsoft has also seen Windows Mobile fade into the background with the launch of Android OS and now the new Palm WebOS, and it may be highly motivated to find a powerful partner to help shore up WinMo.
Dell could help bring Windows Mobile back to the center stage, says
Bonny Joy, senior analyst with research firm Strategy Analytics.
Dell’s greatest challenge will be in creating a cellphone that gets the right blend of design, features and functionality. That’s a difficult goal to achieve, as companies such as Palm and Motorola have discovered recently.
"Cellphones are really hard to make," says Julie Ask, principal analyst at Forrester Research. "It’s not like a PC where it is all commodity and design doesn’t really matter. Why would anyone want to buy a phone from Dell?"
Design has not been a major part of the company’s DNA until quite recently. Traditionally, Dell desktops and laptops were functional and competitively priced, but fugly. That has started to change, as Dell has recently poured a lot of resources into gussying up its designs.
And in the smartphone business, design counts for a lot. Just ask Palm, which saw its market share erode over the last few years as consumers turned away from its bulky Treo phones.
The question is can Dell make a device that competes with the Palm Pre, iPhone and G1 among others?
It could be easier than many expect, says IDC’s Reith. "If you see the top devices launched in the last six months, there isn’t really much of a difference," he says. "So if Dell has a clever design team they can pull this off."
See Also:
- Palm Unveils Its Long-Awaited Smartphone, the Pre
- Six Reasons Why the Palm Pre Is Special
- T-Mobile Launches G1 Android Phone
Photo: HTC Kaiser (recompose/Flickr)
