Cell Adictus

Dell Goes Back to the Drawing Board

As we’ve noted here before, computer maker Dell has been threatening to get into the smartphone market for sometime and the rumors were that their first device would be hitting the market sometime this year.

Well, I guess they tried to shop their phone(s) to wireless carriers and have gotten no interest.

Shaw Wu, an analyst at Kaufman Bros., said in a recent research note that Dell had shopped prototypes of devices running on Google’s Android platform as well as on Windows Mobile to various carriers. But the carriers found the Dell offerings to be dull and apparently thought Dell’s prototypes were not differentiated enough compared to products from HTC, LG, Motorola, Nokia and Samsung.

“From our conversation with supply chain and industry sources, it appears that it ultimately came down to lack of carrier interest and small subsidies, making it difficult for Dell to make a profit,” Wu wrote. “In our view, the last thing Dell needs is to enter another money losing business as it seeks to preserve its operating margins of 5 percent to 6 percent.”

The smartphone market is certainly getting more competitive and anyone trying to break in is going to have a tough time competing against the iPhone, Palm Pre, etc. My personal opinion is that if Dell is serious about this space, they should acquire another company rather than try to go this alone.

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