UPDATED 12:12 EDT / AUGUST 23 2010

Dell Advancing Reach to Tablet PCs and Data Storage

Eschewing netbooks, Dell has gone ahead to push tablet PCs as mobile devices to consumers. In particular, Dell is trotting the globe with its tablet PC offering: the Streak—already selling it in the UK since June, and August in the US, soon to reach China.

Owen Fletcher from the Wall Street Journal writes,

“There are still a lot of netbooks being sold, but I think they’re going to continue to decline in terms of total mix versus what they did the last couple of years,” Felice said.

He also reiterated Dell’s stance that “from a customer experience standpoint, mainstream notebooks are better” than netbooks. Netbook sales have boosted Dell rivals such as Taiwan PC makers Asustek Computer and Acer, but the lower-price machines can also mean lower margins, perhaps helping explain why Dell has shied away from them.

As netbooks provide a lower profit margin than the more expensive and robust tablet PC market, Dell is situating themselves to reap the windfall from rising sales. While Dell has been making inroads into the mobile market, they have long been a desktop and laptop vendor, and tablet PCs are right up their alley.

Also, with Dell’s foray into mobile electronics, they might need to start looking into beefing up their security sector. Others in the same market such as Intel and HP certainly have been. Numerous purchases and mergers have been happening aimed at hardening the mobile security industry. Dell might be the next in the market.

Diversification of consumer electronics and enterprise solutions seems key to Dell’s strategy to gain an edge of competitors. Especially with their recent acquisition plans for data storage maker, 3Par, a purchase that will set Dell back about $1.5 billion. Bloomberg Buisnessweek has an article outlining the planned 3par buy,

Dell aims to compete with companies such as Hewlett-Packard Co. and International Business Machines Corp. in the market for more complex computer systems and technology services that yield higher profits than its mainstay desktop and laptop PCs. Dell said in June that it plans to double the size of its data-center and technology-services business in part through acquisitions.

“The 3Par acquisition gives Dell the needed arrows in its quiver to step up competition in enterprise technology,” said Ashok Kumar, an analyst at Rodman & Renshaw LLC in New York.

Dell expects to run 3Par as a separate business entity and to use their new leverage to increase overall profits, which have been slumping the past year, especially in their storage sector with an 18 percent drop.   It’s something our own Dave Vellante has discussed in further detail here.  The purchase of 3Par should act as a shot in the arm for their offerings in that area, giving them a better edge to compete with.

If you’d like to know more about the Dell Streak, click here.


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