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Closed

23 Jan 2008, 11:59PM PT

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16 Jan 2008, 5:08PM PT

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Would You Buy A Phone Made By Dell?

 

Closed: 23 Jan 2008, 11:59PM PT

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It's long been rumored that Dell will release a cell phone device, given its existing PDA product line, as well as Apple's entry into the phone market. Assuming that Dell is actually going to release a smartphone based on Windows Mobile, how will consumers react? Obviously, it's hard to predict the future of a device without knowing any of its actual specifications, but how do you think it will compare to Apple's iPhone? How will it compare to HTC's Touch (or pick your favorite handset)? Will the 'Dellphone' support Google's Open Handset Alliance? Where do you see Dell's role in the mobile phone market?

8 Insights

 



Dell released a Dell Jukebox and many people did not buy it.  I would rather buy a cell phone from a company such as Nokia than Dell, as I know what to expect from the brand, as I've been using Nokia for 8 years now. Dell is not already a cell phone manufacturer, so they would have to make something better or easier or in order to market it saleable.  I don't see Dell in the mobile phone market at all.  I see new companies making mobile phones, yet Dell is expanding its product line too much.  If Dell had an operating system like Apple does, then I'd see Dell in the picture.

Thank you, and if there are any Android developers in New York City, please contact me!

If Dell enters the mobile phone market, they will get killed by the big names like Motorola, Samsung and Nokia.  However, if they enter the smartphone market, they may have a leg up on the competition because of brand name awareness.  Dell needs to carefully bill their "phone" as a mobile computer with a phone in it, rather than a mobile phone with a computer in it.  Perhaps a co-branding scheme such as PDA smartphone "powered by dell", but manufactured by Samsung or Motorola?

I would suspect that Dell's smartphone would enter at a strong position based on their history and strong ties to the market.  Dell can leverage their business contracts to push out waves of smartphones just as they do hardware refreshes to many businesses based on contracts.  Dell's trick will be to not tie the device to any one provider.  Dell's long history with Windows suggests they would not go with Google's platform at first, but may provide a separate phone to support that at some point, just as they currently support both Linux and Windows PC's.

If you can get the Dell phone with Wifi and VOIP without a contract, then Dell would have a great chance to Trump many other smartphones including the iPhone, which all require data contracts, even if the phone supports WiFi.  I don't want to have to pay for phone or WiFi if my device will support them for free... odds are I'm in a place that has free WiFi most of the time.  If I am going to be in the woods or something and I need phone service, I should be able to get it for a per-minute allowance.

Dell does need to carefully respect third-party developments on their smartphone.  If Dell were to prevent custom applications, they would just invite hacks of the device anyhow.  Defending against white-hat hacking like this is costly and ineffective, as Apple's iPhone has demonstrated with cited numbers as high as 25% of all iPhones in use having chip hacks.

 I am still interested to see the public openMoko device hit the mainstream; comparing this device with Dell's device and Google's device should open a new market if they are all contract independent.  the iPhone is definitely hurting itself with its ties to AT&T.

I don't think I'll be buying a Dell Phone anytime soon, but that's because the wife is so madly in love with Apple, and I tend to follow her lead on technology, if only to make sure we're on compatible platforms. 

Dell doesn't have a good reputation in the blogosphere, even though they've made up for some of their earlier Customer Service problems.  There's lingering resentment, similar to that of cable companies and fast-food restaurants.  Dell is a brand you buy when you want a throwaway.  The perfect example, is that I bought a Dell Latitude laptop as a test PC, and to run one application that wouldn't work with our Apple machines.  It's become the laptop I lug around, because if it breaks, I can easily replace it. 

 In my mind, that's what the Dells are - cheap products that you use as a last resort.   Now that doesn't mean it's true.  Dell has high-end products as well, and I don't know that  Vaio or some other product is superior, but for most of my corporate life, I had Dell  or Compaq desktops and laptops.  They were older products purchased by the company in bulk, and that's how they were perceived. 

Most of the people I know have that view of Dell as a brand, but each branch of my family has at least one Dell as a computer, so maybe that's not a bad place to be.  The iPhone is expensive, and we're still locked for the most part into AT&T.  If Dell has a competing product with the iPhone, it better walk on water, and it's already missed the boat with early adopters.  It's too difficult to switch to Apple, and then switch back for a new PDA. 

 But what if Dell's target market wasn't the cool kids?  Dell sells large quantities to corporations.  If they were selling phone, why not go after the audience most likely to buy in bulk?  We all know that the Latitude or other Dell laptops is usable, and we learned it because our employers bought them for us. There's even a sense of familiarity with the product. It may not be shiny and new, but at least I know it's flaws because I've worked with it.  Add this to the fact that Windows Mobile is far more compatible with our office applications, which are still mostly Microsoft, and the built-in audience starts to make more sense. 

 If I get a Dell phone that integrates easily with my office software, address book, and applications, and it's part of my corporate lifestyle, then there's a convenience that I may adopt in my personal life.  I mentioned earlier that the wife would purchase the iPhone, but if already had a Dell phone, and it was just better than average, the chances of me buying for the family go way up.  We all have to be on the same plan, and even if it's not the iPhone, it's the best option when Daddy or Mommy has to carry it for work. 

That's the sweetspot for the marketing plan.  Playing to their strengths is the smart move, but my guess, is Dell trys to compete with iPhone and reverts to rebates and expensive television marketing to make a concerted push, that fails.  My prediction:  The phone sells less than expected because it sells to the wrong crowd.

-Jim Durbin 

 

 

 

 

 

 

 

 

 

The question is in two parts.

1. Would consumers trust the Dell brand  ;when it comes to telephones?

2. Is Dell techn ically capable of developing and manufacturing a&n bsp;phone?

There is, implicitly, a third question which can be applied to both the above:

a. Can they compete?

 

Starting with #2:  Is Dell technically capable of developing an  manufacturing a phone? 

First, developing. Answer i s no. It is different to develop a phone  and a PDA, and there are many more  ;pitfalls in making a phone work than a  PDA (viz. the HP combination smartphone/PDA). Unle ss you have specialized engineers working very&nbs p;hard for a long time, and license specializ ed parts (which anyone can do, of course)&nbs p;it is not likely that you can make it.  And it is hard to see Dell make th is investment for something which can be marg inal to them at best, at least initially.

That  said, they can always license a smartphone&n bsp;from someone else, like HTC. So they coul d easily provide it. Which also answers the&n bsp;first part of 2a. 

Then, can they manufact ure?

Of course they can. Manufacturing a phone  ;is no more difficult than manufacturing a PD A, as long as you do not have to de velop it. And the Dell logistics would be&nbs p;well suited for this type of delivery, alth ough it is doubtful that you could get e conomics in the razor-thin margins of the mob ile phone industry manufacturing them on order&nbs p;instead of in small batches. There is less& nbsp;reuse of components between models (you could  only use a limited set of the component s in the phone in a PC, but large p arts of a PDA can be re-used in a P C). 

That also partly answers the "can th ey compete" question. It is probably very&nbs p;hard to compete with the established phone  manufacturers in this area. They have huge ec onomics of scale and very optimized production&nbs p;processes. Given the thin margins, it is ha rd to see how the Dell process could mak e money.

 

Then, #1. Would consumers trust the& nbsp;Dell brand?

Answer: As long as it is chea p enough. Dell has established itself as a&nb sp;brand which presses down the price for hig h-end items, and it is hard to do that&n bsp;with a smartphone. So consumers trust Dell&nbs p;to do reasonably good stuff at decent price s, with customer service to match. They would  probably trust the brand. 

#1a, then: Would&n bsp;customers trust it so much that they woul d choose Dell as their primary provider of&nb sp;a cell phone? 

Has Dell earned this trust?& nbsp;No, probably not, especially not in the  face of established competitors such as Nokia,&nbs p;Motorola, and SonyEricsson. Even Samsung is more  trusted when it comes to phones. Apple  has its fanatical followers to thank for the& nbsp;initial success of the iPhone - without  a fan base that buys anything Apple, I d oubt Steve Jobs would have taken the big  ;step of starting development. Apple is also  able to charge high margins for what they&nbs p;do. It is hard to see Dell doing that,  and they need to if they want to c ompete in the cellphone industry.

Still, if Dell&nb sp;sees this is necessary as a complement to& nbsp;their business, they may have to. For in stance, if they have a big customer who  has got tired of buying Blackberrys and want& nbsp;to give their salesforce smartphones. 

Still,  they will probably license somebodys phone and&nbs p;put the Dell brand on it, and that wil l be it. 

Hope this helps. 

 

//Johan 

Dell is a pretty solid company in it's field, which is cheap mainstream computers. I believe Dell offers a good range of computers and related equipment. Dell also offers a range of PDA's, and it is only a matter of time for Dell to release a cell phone. I would not buy it though. Let me explain this. Although embedded Windows (Windows Mobile) is a much better product than *regular* windows, if you look at effeciency and ease of use, windows is not the mobile platform you want to go for. 

Personally, I am a heavy blackberry user, which is exceptional in this part of the world (Western Europe). After having used Palm devices, which were superior years ago, and symbian devices (Nokia E61 is a sweet phone), I know that nothing can touch Blackberry. You might say I am biased, but understand that I have tried many devices prior to switching to Blackberry, so I believe my opinion is worth something.

As Dell might release a cell phone, possibly running Windows Mobile, but probably also supporting Google's Open Handset Alliance, I would recommend this handset to users of *regular* mobile phones, as there will be added value like extended address book functionality, internet synchronization (email!!) and more. It will empower anyone to keep online blogs, pictures of family and friends and more. it will make you part of the social network the internet is becoming. On the other hand, I would never get one, besides for testing purposes maybe. Why? I need the professional services a blackberry offers. I rely on it and run my business from it. 

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Matthew Lasar

Ah, Dell Computer. I'll never forget that night when my Dell tower died.

I called up Dell technical support and heard a message informing me that Dell's tech help number had changed. So I called the new number, and got somebody's office instead. This person rummaged around some phone directory and gave me yet another 1-800 to dial, which landed me in somebody else's office, who did the same as before.

Each factotum assured me that THIS was this correct number to call. "You're sure?" I desperately asked. "Yes, absolutely," came the reply. Said nightmare went on for a while.

Finally, I lost my composure with the sixth desk jockey. "Please don't raise your voice with me sir," she said. "I'm not here to be yelled at." She wasn't there to help me either. But she did get me to Disembodied Voice Number Seven, who managed to find the actual tech support desk, whose functionary concluded that my motherboard had died. He gave me a reference number, and told me to call back in the morning for an assignment to a local repair shop.

Next morning I did as told, and was informed that the company's support database had crashed, and that my diagnosis had to be repeated. The motherboard was pronounced dead yet again, and the coroner directed me to the appropriate warranty repair establishment, whose geniuses replaced the motherboard, but neglected to change the bootup options, so I wound up looking at the BIOS set up screen every time I turned the computer on. Finally I figured out how to fix this.

Because I try to look on the bright side, I will always thank Dell for helping me learn about the BIOS setup utility. But that sure doesn't mean I'd buy a cell phone from them. There are only so many looking-back-it-was-a-positive-learning-experiences I can stand.

 

Dell has some big challenges ahead of them to carve out a "branding' space in the smartphone market. 

Most of the new phones are very good, and from a strictly rational point of view we should start viewing mobile devices as a commodity - users should not show loyalty to particular brands and should make their choices based primarily on the features they need in the phone.  

Yet brand loyalty remains a powerful force in the market.  Apple has always had a customer base that shows a powerful loyalty to Apple products.    Apple's brilliant iPhone innovations made this loyalty easy and made the iPhone best in the smartphone class for a short time even though innovations across the board mean that most users probably should list the features they need and then pick the mobile device(s) best suited to their individual needs.

Likewise I think Blackberry has become the smartphone of choice for many professionals, especially those outside of the tech industry (where you used to find Palm Treos but increasingly seem to find a plethora of mobile options as early adopters experiment with new models, video podcasting, etc).

So, can Dell duplicate the smartphone branding success of Apple and Blackberry?   NO.    They may make a good phone, and they may enter the market successfully, but without a breakthrough hardware advance it seems very unlikely that Dell Phones can become anything more than ... just another smartphone.

Assuming that Dell is actually going to release a smartphone based on Windows Mobile, how will consumers react?

Favorably but weakly for the reasons above.    As a "commodified" computer brand it seems unlikely Dell can gain much from their existing brand recognition in the smartphone market.

How do you think it will compare to Apple's iPhone?

Dell's reputation is not as a product innovator, rather Dell is an online *sales* innovator that took basic PCs of average quality and found more effective ways to sell them online.    As a phone maker I suspect Dell will produce pretty much an "average" smartphone, which would make it somewhat inferior to the iPhone but probably in the same general ballpark in terms of features and quality.    

I would expect Dell to bring their innovative salesmanship to the equation and lower-than-iPhone pricing, which could create some opportunity for Dell in the market.

How will it compare to HTC's Touch (or pick your favorite handset)?

I think Dell *should* consider using the excellent HTC Touch design, which in some ways is similar to Dell's discontinued Axim, and combine it with a slide out keyboard which many users prefer to the clumsy touch keyboards of iPhones.   However I think the failure of the Axim and the difficulties and costs of sliding keyboards may bring a design more like the Treo Centro which is more "tested" and cheaper to produce.   Unfortunately for Dell the Centro is really too little too late in the smartphone market.   

Will the 'Dellphone' support Google's Open Handset Alliance?

Yes, I think this is likely.  Dell should recognize the challenges of branding described above, and therefore seek to become an early adopter of the trend of the future, which is the open architecture advocated by Google and Open Handset Alliance.   What they'll lose in potential to "brand" their own phone and service they should gain back as the market is likely to shift powerfully in the direction of open hardware and network architectures and portable numbers. 

Where do you see Dell's role in the mobile phone market?

I'm skeptical that Dell can bring enough innovation or brand power to the smartphone space to play a significant role.   As noted above Dell does not have a history of product innovation or a brand name that is associated with elite products.   Also, a lot of players will be coming into the market soon as open architectures prevail.    Without significant hardware innovation - the kind of innovation that would be cost prohibitive for Dell - I don't think they'll make much of a mark here.  The exception might be Dell's ability to sell very effectively.  If they can create an "average" phone but "above average" online sales effort they may make their mark in this mobile market.

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Joseph Hunkins
Wed Jan 30 12:26pm
Rumors of Dell / Google partnership. A *Google* branded phone would have a lot more appeal in my view than a Dell phone, especially to the youth market that cannot afford iPhones.
http://www.marketingweek.co.uk/cgi-bin/item.cgi?id=59407&d=254& ;h=260&f=3
Dell has always competed on price (and customization) rather than cutting-edge form. That's why they're doing better in business markets and struggling in consumer markets. (While Dell's losing the consumer market to Apple, Dell has already captured than 28% of the market for small- and midsized businesses.) I'd expect them to offer a smartphone that's attractive to their business customers — cheap, customizable, and probably a little stodgy.

Even in the consumer sector, Dell made it clear that they're targeting the low-end. (Partly because Apple is already dominating the high-end!) Dell's new consumer strategy involves direct sales through Walmart, so they'll definitely try to keep prices down rather than dazzle consumers with cutting-edge and expensive features. This could lead to a smaller device, like HTC's playing card-sized Touch. I'd expect Dell to go with a cheaper screen, maybe leaving out video entirely or offering the option of a cheap two-color screen (for business customers who only need its text messaging capability.)

But that strategy leads to an interesting wrinkle. This week Dell announced a deal with Fonality to offer business customers a a VoIP solution. Maybe they'll try to entice consumers (as well as businesses) by offering a cellphone with a cheap VoIP network plan!

There's one big problem: the cellphone space is crowded. Dell may be smart to target the last section of hold-outs, those consumers who resisted cellphones over fears about cost — and Dell's new retail outlet partners can definitely help them reach those consumers. But even if they can scratch up a new vein of customers, it's still hard to realize significant profits. When you compete on cost, your margins are always low.  Dell's always compensated for this with volume — but volume will be hard to achieve since they're the last player to enter the market.

Given Dell's history, I predict that they'll support Google's Open Handset Alliance — eventually. I'm sure they'll offer it as an option down the road, when there's a mass of customers who request it. But remember that it took Dell nearly seven years just to pre-install Linux on their machines. (And there were rumors that Dell knuckled to pressure from Microsoft to avoid supporting the more open operating system.) If Microsoft wants to resist Google's assault on their Windows Mobile OS — Dell will face serious pressure to resist it too.

The real question will be whether Dell can compete in that space, since Dell knows that Apple will always have cooler devices, with better interfaces and more powerful underlying technology. I predict that any "Dellphone" will be end up being cheap but underwhelming — and that ultimately, a lot of people will be rooting against it.