Dell has announced decided to cease its smartphone business worldwide. This was announced by Jeff Clark, the head of the consumer business at Dell, during his speech at Dell World 2012.
According to Clark, the rejection of the smartphone market has become a difficult decision for the management of the company, but Dell still decided to completely abandon the business in this area. The company still has long term prospects for the PC business and remains optimist with the arrival of Windows 8.
Clark said for the company to succeed in the smartphone market, Dell would require serious investment on their part, and it’s just not a top priority for them right now. He mentions Amazon’s strategy, which quickly made them a major player in the Android market. But Amazon has compromised of the on the sales of the devices, selling their Kindle tablets at cost or even below cost, making profit through digital content and retail sales instead. Clark said that Android is also strongly tied to the content, and Dell has not been able to find a way to make money on the Android operating system.
Failed to capitalize on smartphone growth
According to analysts, Dell’s decision is part of their strategy to focus on key areas of business. However, their failure in the mobile market, which is projected to reach $150.3 billion in 2014, can be described as a rather controversial step for a company that was once king of consumer electronics.
To date, Dell commercially sells smartphones with operating systems like Android, and Windows Phone, but only limited to markets in China and India. Earlier this year, the company reported that it will stop selling them in the U.S. In some other countries, you can still find smartphones for sale from Dell, however, it is likely that they will soon disappear from store shelves.
Dell’s early mobile attempts
Dell announced its first Android smartphone in late 2009, with the Mini 3i. But Dell will be remembered for its 5-inch mini-tablet Streak, released a couple of years ago. The Streak tablet (Streak 5 and Streak 7) didn’t exactly receive rave reviews. In late 2011, the company made another attempt to penetrate the smartphone market with the Dell Streak Pro in China, running the homegrown operating system Baidu-Yi, but it seems that also failed.
Mistaking mobile trends
Interestingly, during last year’s Dell World conference, founder and CEO Michael Dell accused Android that their smartphones were unable to gain a foothold in the market, saying that “Android is failing.”
Now, for the foreseeable future, Dell will concentrate on the production of computers, laptops and tablets running on Windows. Clark said that they’ll be keeping an eye on Android, but in the short term, Dell does not see the OS holding much promise for Dell devices.
“We’ve been really clear about smartphones — we’re not going to do smartphones,” Clark said. “We’re not going to be in the smartphone hardware business. We’re going to provide smartphone solutions, we’re going to be the preferred BYOD provider of solutions in the marketplace,” he added.
The company has also made it clear that in the long term it can release gadgets based on Android, but when these devices will hit the market is not clear.
BYOD is the next big platform
Dell’s not saying goodbye to Android forever – Clark says Dell Labs will continue to experiment with the mobile OS. But the major focus for Dell will be securing all the devices in a “Bring Your Own Device” environment for the enterprise. It’s all part of Dell’s focus to become the industry’s leading provider of end-to-end solutions.
Dell will work on its own BYOD platform, with partners, for the company’s enterprise clients through acquisitions and in-house development.
Employees are pushing productivity to unsuspected levels by using mobile solutions. Dell sees this as an opportunity to help bridge the gap between personal and professional devices.
Dell’s strategy regarding the future of mobility is called Dell Mobility, and will focus on maximizing the total experience of mobility in organizations with solutions that enable access to data anytime, anywhere. The proposed solutions will enable companies to provide flexibility to its employees and maximize end-user productivity by giving empowering IT professionals to achieve greater efficiency of deployment, management and safety.
Dell plans to offer products that provide greater durability with greater reliability. Dell Mobility will allow seamless integration into any environment, where the user makes the most of their devices. Dell thinks there is really an immediate need for Windows 8, because CIOs are worried about the ramifications of a BYOD world.
The company indicated that it will introduce a new package of software for securing and managing Apple and Android devices in a virtualized desktop environment in near future.
Dell Still Bullish on PCs
Dell is returning to the “native land” – to focus on what it does best – selling PCs. In addition to the PC, Dell will develop tablets and hybrid devices on Windows 8/RT.
“I look at the middle class as it grows over the next 20 years from 1.8 billion people to 4.9 billion people and the opportunity for PCs there,” Clark said.
Windows 8 will be Dell’s focus on the device end, believing Windows 8 brings a lot to the tablet market. It allows Dell to put tablets in the hands of customers with a set of management tools they are already familiar with.
“There are about a quarter billion PCs sold every year and the installed base of PCs is about a billion and a half. Overwhelmingly, PCs are how business gets done in the world today,” Michael Dell said at the Dell World customer conference. “And now with Windows 8, we’re on the cusp of the next revolution of Windows hardware and software, bringing together the laptop and the touch screen.”
In the current lineup, Dell introduced XPS 12-inch convertible Ultrabook running Windows 8 starting at $1,200, an XPS 10-inch tablet running Windows RT starting at $500 and a Latitude 10-inch tablet running Windows 8 Pro, starting at $650.
In the traditional PC market, where Windows 8 does not seem to have broken through yet, Dell has aligned its devices with touch capabilities in order to meet the needs of companies in terms of security, manageability and reliability.
“The interest in Windows 8 is quite high, even among commercial customers who tend to be slower to install new software,” Dell said. “PCs are still how business gets done.”
There was one other device Dell unveiled during his keynote, describing a desktop workstation that features a pop-out screen that doubles as a portable tablet. The event offered no other details on this device, which only made our Editor Kristen Nicole more curious about its potential. She discussed the workstation on #theCube during Dell World. See the full clip below:
Windows 8: A BYOD solution?
It is hard to say how Dell will translate any apparent interest in Windows 8 into sales. Mainstream Windows 8 devices apparently aren’t selling all that well. Bob O’Donnell, an analyst for IDC, said only the 10% or so of Windows 8 devices that are touch-enabled are selling. Other research firm results including NPD indicated that Windows 8 support hasn’t been as strong as predicted or hoped for.
“Most touch screens for notebooks (basically, anything bigger than phones) are the LCD plus a separate panel bonded on,” O’Donnell said. “The problem is, the yield rate for these panels is low, the capacity is relatively low, so bottom line, we think only about 15% of notebooks will have touch next year. Plus, they’re expensive, which just adds to the problem.”
Dell focus on tablets has primarily been in the commercial side and a window 8 feature has a life cycle of profitability attached to it in terms of services agreements and other add-ons.