Dell Ready Getting Ready to Deliver a Smartphone? - InformationWeek

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3/25/2009
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Dell Ready Getting Ready to Deliver a Smartphone?

Smartphones have become all the rage among vendors as well as small and medium business executives. With Apple and Google garnering headlines from their devices, other suppliers have decided that they too would like to enter that arena. Dell is the latest vendor reportedly building a smartphone. Although the initial reports about its system have been mixed, its entry may have an impact on your business.

Smartphones have become all the rage among vendors as well as small and medium business executives. With Apple and Google garnering headlines from their devices, other suppliers have decided that they too would like to enter that arena. Dell is the latest vendor reportedly building a smartphone. Although the initial reports about its system have been mixed, its entry may have an impact on your business.Since vendors have been able to deliver systems that combine a great deal of functionality in a small form factor, executives have come to rely heavily on smartphones. Consequently, the phones sales have been growing at a robust rate: market research firm In-Stat expects them to double their share of the cell phone market by 2013. Therefore, it is no surprise that competition in this space has heated up. Apple made the most noise mainly because of the iPhones novel input options, and Google pushed the cell phone market in an open source direction. In addition, entrenched competitors, such as Palm and Research in Motion, have tried to add new functionality to differentiate their devices.

As a result, Dell is moving into a market segment with a fierce competitive pressure, and it seems like the company may be having problems identifying something special enough to generate interest in its entry. A research note from Shaw Wu, analyst at Kaufman Bros found that carrier interest in Dells system was tepid. Without any carriers willing to carry the product, the vendor will be hard pressed to generate the buzz -- and more importantly the distribution channel -- needed to make headway in this highly competitive market.

Yet, Dell has proven its skeptics wrong in the past. The company has been able to build a multi-million dollar business by delivering low cost, high performance hardware that was simple to deploy, and its approach has met the needs of many small and medium businesses. Also some observers did not think that the company would be much of a factor in the storage market, but such predictions have proven to be incorrect. Consequently, its expected entry into the smartphone market could drive pricing down and make the devices more appealing to small and medium businesses.

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