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Sat, Mar 20, 2010 - 08:23 AM EDT  —  AAPL: 222.2499 (-2.4001, -1.07%)  |  NASDAQ: 2374.41 (-16.87, -0.71%)

WSJ: Dell considering entering smartphone market
Friday, January 30, 2009 - 12:01 AM EDT

Apple Online Store"Dell Inc., aiming to rev up sales as its mainstay personal-computer business struggles in the recession, is preparing a move into cellphones as early as next month, said people familiar with the matter," Justin Scheck and Yukari Iwatani Kane report for The Wall Street Journal.

"The Round Rock, Texas, company has had a group of engineers working on the phones for more than a year from an office in the Chicago area, these people said. They produced prototypes built on Google Inc.'s Android operating system and Microsoft Corp.'s Windows Mobile software, these people said," Scheck and Kane report.

"Dell is focusing on so-called smartphones, higher-end devices that include features like Web browsing and email. One model includes a touchscreen but no physical keyboard, like Apple Inc.'s iPhone. Another is a slider-style phone with a keypad and that slides from beneath the screen, one person familiar with the devices said," Scheck and Kane report.

"Dell hasn't finalized its plans and may still abandon the effort, which would pit it against such powerhouses as Apple and Research In Motion Ltd.," Scheck and Kane report. "A Dell spokesman said the company hasn't disclosed plans to offer phones, adding: 'We haven't committed to anything.'"

MacDailyNews Take: Oh, please, please, please be stupid enough to commit!

Scheck and Kane continue, "Last summer, it scrapped plans to sell a digital music player with a wireless Internet connection. Dell tested the music player for months and had even lined up production before canceling it, people briefed on the matter said."

Full article here.

Reuters reports, "If launched, the phones will be based on Google's Android operating system and Microsoft's Windows Mobile software, the Wall Street Journal reported on Thursday."

"Dell hired Ron Garriques, Motorola' former cellphone chief, to re-energize its consumer products division. But, under a non-compete agreement, Garriques was barred from working on mobile phones until February 2009," Reuters reports.

Full article here.

Dan Frommer reports for SIlicon Alley Insider, "How might Dell differentiate itself from other Windows Mobile or Android manufacturers, such as Motorola, LG, HTC, Sony Ericsson, etc.? The WSJ suggests it could include media syncing software from a company it acquired called Zing."

"Why would Dell go into the phone market? It's looking for growth and the smartphone market is growing," Frommer reports.

Full article here.

Jim Goldman writes for CNBC, "What's amazing to me is how long this company's hand-wringing has gone on. Dell has watched Apple and Research in Motion, and Samsung and Nokia tighten their control at the expense of just about everyone else trying to gain entry."

"Plus, why Dell decided to re-invent the wheel when it could've bought Palm for a song last year is beyond me. Unless it shows just how messed up Palm was that even a company behind the 8-ball such as Dell didn't think taking out Palm was worth it," Goldman writes. "Ouch."

Goldman writes, "Dell has been a sore under-performer since its prodigal, namesake founder returned to rescue it. The company continues to lose ground against Hewlett-Packard, its stock -- down 60 percent last year, is now trading below $10 a share. It's plagued by layoffs, hiring freezes and cost-cutting. And now, to try to improve things, it's trying to enter one of the most competitive sectors in all of tech," Goldman writes.

"Dell apparently won't confirm a smart-phone entry, and the Journal says it could still abandon its plans," Goldman writes. "Seems this would have made far more sense a year ago, or two, or three. Instead, Dell becomes a Johnny-come-lately to an already very crowded party, at a time when wireless providers Verizon, AT&T and Sprint all seem to be suffering."

Full article here.

MacDailyNews Take: Mikey might actually have more screws loose than the average Dell laptop.

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Jan 30, 09 - 01:09 am Comment from: Jubei

Coming soon: "Dell DJ DItty Part Deux"

Jan 30, 09 - 01:35 am Comment from: Zune Tang®

@ Jubei

I prayed this day would come.

If Dell can bring the same magic to a smartphone that they brought to the Ditty I'd suggest MAC shut their doors after the I-Phone debacle. There's a lot of room in the smartphone market for something truly innovative, user friendly and comes with terrific third-party apps and simple, integrated app delivery mechanism. Mr. Dell, I'd suggest Windows Mobile 7, but you knew that already.

Your potential. Our passion.™

Jan 30, 09 - 02:00 am Comment from: ken1w

> which would pit it against such powerhouses as Apple and Research In Motion Ltd.

In less than two years since entering the mobile phone market, Apple is now considered a "powerhouse" by the popular media. And they did it essentially by selling ONE product through ONE wireless provider. I am constantly amazed at how Apple succeeds by being the antithesis of every competitor, who all seem to maximize the number of products and distribution channels.

That's why so many so-called industry "analysis" get it wrong so often when it comes to Apple. They expect Apple to act like the rest of the industry, whether it's mobile phones, computers, consumer electronics, or music distribution. They can't seem to grasp that Apple thrives by intentionally being different from the other players, so they can play by a different set of rule.

Jan 30, 09 - 02:32 am Comment from: kirkgray

Introducing the Dell MeToo™

Jan 30, 09 - 03:20 am Comment from: 84 Mac Guy

A Dell smartphone. Isn't that an oxymoron?

Jan 30, 09 - 03:22 am Comment from: almux

Deffinitely Z.T. loves the followers and other imitators... Ho! A propos "imitator": Z.T., when does your show come to television? It could be real fun!

Jan 30, 09 - 04:04 am Comment from: winmacguy

I like the bit about
" a touchscreen but no physical keyboard, like Apple Inc.'s iPhone."
If its too much like the iPhone, Apple will sue them out of existance.
Hah.

Jan 30, 09 - 06:24 am Comment from: zek

"a company behind the 8-ball such as Dell" -- where do they get these people from?

Jan 30, 09 - 07:04 am Comment from: YoYo

You might have heard this already, but me and my across the street neighbour are concidering entering the cell phone market too, and the guy in the end of the street. Yes, in that yellow house, he too.

Apple has made everything so easy these days with their iPhone, it looks like lots of fun and easy to copy at the same time. Here we come...

Jan 30, 09 - 07:28 am Comment from: Davecc

Hey Zune,

Enjoy you Dell DumbPhone®

Jan 30, 09 - 07:47 am Comment from: R

Following Apple and swiping from them for inspiration is so obvious! For years, most people didn't see it because Apple was too small and its presence in the world too small. At least now, everyone is aware of what Apple does, it seems. It is getting the kudos it deserves, so I imagine it's going to be hard for Dell to compete here.

Jan 30, 09 - 08:00 am Comment from: Richard

Zune + Dellphone does not equal iPhone. I wonder what colors it will come in: brown, red, and beige? Will it be squirt-compatible with Zune? I hope it's preloaded with pictures of Gates, Dell and Ballmer, fanbois would buy it just for that.

Jan 30, 09 - 09:04 am Comment from: Mark S.

What a damn joke! I can see crummy the reviews from the Winfan writers about a Dell "iPhone killer" phone and it turns out to be crap like the Storm and the Zune combined.

Who's next? Lenovo with some shoddy Darth Vader looking iPhone wanna be selling for $49.95?

Could be!

Apple. Real Intelligent Design.®

Jan 30, 09 - 09:20 am Comment from: madgunde

Oh yes please let this be true! It'll be one more cinderblock tied to Dell's feet helping to pull them deeper under water!

Jan 30, 09 - 10:14 am Comment from: January 24, 1984

It least it'll be funny!

The MikeyPhone.

Jan 30, 09 - 10:17 am Comment from: Demon

The Dell Sorta Smart Phone available is Beige, Tan, Brown, and Burnt Umber (for the ladies).
1970's colors for a 1970's kind of company.

Dell does have one thing going for it though and that is they do sorta know when to kill a looser product line like the Ditty. Unlike Microsoft that just can't admit that a product lines are losers like the Zune (trounced by iRiver, Sony, San Disk and Apple) and Xbox 360 (Peed on by the Wii, Lost High Def Movie Play back to the Sony, Let Sony kick the crap out of the Xbox 360's Quality and lost the only great thing the Xbox had going for it, the in-house game studio Bungie because MS Management was arrogant and cheap. Now without Bungie the Xbox has no purpose and has no edge over the competition at all.)

But, for Dell their big problem is they are so frighten that they'll lose that most of the time they simple don't try. But, they'll waste millions on developing new product outside their core business just to flush the cost and the products. If Dell would focus on it's core business streamline it. Jettison the lowest and no margin systems and offerings. Put some R&D;money into the remaining Core products and avoid looking at other peoples Grass. They could grow a lot and be profitable at the same time.

If your selling 2 separate model lines of Laptops and the only major differences in the lines are the case, one line is a bit faster and the slower (lower margin) line is a lot cheaper what are you going to sell. That's right you're going to sell the cheap model line in greater volume then the more expensive faster models. When your margin on the cheap line are thinner then Kate Moss's body fat index your not making money even if your selling them by the train loads. So, you need to discontinue both the high end and low end lines and replace both lines with a single line of Mid range hardware line in a nice upgraded mid range skin. You then price it with a fair margin built into the core price. Then the upgrades you can price with thinner margins across the line. Now your Laptop line is making a profit and your business is growing again.

The other thing Dell needs to do is stop by default including an OEM distribution of Microsoft Windows on each Computer sold. Make the default OS Linux for everything. Then if the user want's a Microsoft Windows OS installed charge the user full retail price plus an install fee. Do not however load up the systems with shovelware, unless, you're doing a Windows install fee sponsor by, <insert company name> and their software is included in the OS Install. But, make sure the customer is aware and given the choice to opt out of the promotion.

Jan 30, 09 - 10:57 am Comment from: @Zune Tang

Windows 7?

The Ditty?

You kill me!

Jan 30, 09 - 12:26 pm Comment from: Gregg Thurman

I hope DELL introduces a smartphone. It was all the new music players, each introduced to grab some of the excitement/share that the the iPod was getting, that cemented the iPod as the must have player.

A dilution of the competition's effort will do nothing but reinforce the supremacy of the iPhone.

Jan 30, 09 - 01:07 pm Comment from: Al

Dell and Smart in the same sentence.

It's been years since I've seen that.

Jan 30, 09 - 01:17 pm Comment from: Noodle-Armed Choir Boy

DELL knows its market.

Even if everyone wants one, not everyone will buy an iPhone.

Despite any marketing hype to the contrary, DELL knows that they will never get a major share of the smartphone market, but DELL also knows that there will always be a percentage of market left over for the also-rans to still make some pretty coin.

DELL and the others know that all they need to do is market a phone with a long list of features on the box, manufacture it as cheaply as possible (Hello, DELL!), and don't worry if the features actually work, (and if they do work, no-one would brave the frustration to try to use the "features" a second time).

These companies are all essentially marketing disposable, fake iPhones, and there will always be a segment of the population who will buy these because of:
1. The feature list
2. The low sticker price
3. A percentage of people who refuse to believe that one must pay real money to get a high-quality product.

Jan 30, 09 - 01:29 pm Comment from: Not Rob Enderle

Oh, please, please let Dell hire the estimable Rob Enderle to provide them with the market insight, industrial design expertise, and Yoda-like wisdom they need to make this project a glowing success. We didn't get to see what the Enderlean music player would look like - I really want to see what the ePhone will be.

Jan 30, 09 - 01:34 pm Comment from: Dude

Dude, you got a Dell

Jan 30, 09 - 01:48 pm Comment from: HMCIV

MacDailyNews Take: Mikey might actually have more screws loose than the average Dell laptop.


OMFG!!! You have no idea how many screws I ended up taking out of my '03 Inspiron trying to fix the RAM. And then screws just started randomly falling out. My Pinto held together better!!!

Jan 30, 09 - 01:59 pm Comment from: MacAdvocate

@Noodle-Arm

1999 Dell is not 2009 Dell.

Dell was the innovator in the low-margin built-to-suit computer business 10 years ago. That's how the company grew. People have caught on to that angle since and now (almost) everyone is in the low-margin build-to-suit computer business. Just because they innovated a way to build a custom computer cheaply doesn't mean there's any competitive advantage to it now, nevermind in a line of business in which Dell has no experience.

The sector is so saturated with options right now that by the time Dell could figure out how to make a profit, they'd already be several quarters in the red. It's the last thing the company needs right now.

Jan 30, 09 - 02:33 pm Comment from: Gregg Thurman

"These companies are all essentially marketing disposable, fake iPhones, and there will always be a segment of the population who will buy these because of:
1. The feature list
2. The low sticker price
3. A percentage of people who refuse to believe that one must pay real money to get a high-quality product."

How'd that logic work out for the Ditty and the Zune?

iPod has a 76% worldwide market share. Can the iPhone achieve the same share of the smartphone market? I wouldn't want to bet against Apple, not when they have a two year head start.

Jan 30, 09 - 05:25 pm Comment from: Me on this iSland

I know someone who knows I've used nothing but Macs for a decade, has used an iphone himself for 12 months, is thinking of buying an iMac for domestic use, and still thought he got a good deal when he bought his son a Dell laptop for Xmas. Some will never see the light.

Jan 31, 09 - 04:38 pm Comment from: Son of Squidward

@Demon:
You forgot avocado!

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