dellPhone a rumor at best – Michael Dell

January 30, 2009

The Web may be buzzing with stories about whether computer maker Dell should or shouldn’t get into the cell phone market, but the company itself  has tried to stay out of the public discussion. 
Michael Dell said on Friday that reports of Dell’s cell phone ambitions were “best described as a rumor” when chased by reporters at the World Economic Forum in Davos, Switzerland. 

The analysts had this to say about the computer maker doing battle with rivals such as Apple in the cut throad phone market as well as in computers. 

 Some were encouraging:

“This strategy makes a lot of sense. Smartphones are a big opportunity and in a way they’re canibalizing notebook and netbook sales to a degree,” said Kaufman Bros analyst Shaw Wu. “It’s probably minor today but could become bigger over time as smartphones get more powerful. It’s better to go embrace the threat than doing nothing.”

He added, “They’re used to competition. It’s not easy. But against Apple and Research In Motion it’s going to be particularly difficult … What it boils down to is price and a decent brand name. Dell has a decent brand name.” he said.  “The risk is that its tough to differentiate. Apple and Rim in particular are very tough competition. Not even the Nokias, the Motorolas, LGs and Samsungs have figured out how to compete with them yet.” 

Others were skeptical Dell could succeed:   

“It’s doubtful that Dell ends up being anything more than noise in this market. it will probably end up being one of their forays that doesn’t amount to much,” said Collins Stewart analyst Ashok Kumar. “Its highly unlikely they’ll get sponsorship from the major carriers. Its going to be a me too product … what is it they’re going to bring to the table? The only factor they can differentiate is on price.”

Reporting by Emma Thomasson and Nichola Groom in Davos

(Photo: Reuters)

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[...] Reuters: Michael Dell said on Friday that reports of Dell’s cell phone ambitions were ‘best described as a rumor’ when chased by reporters at the World Economic Forum in Davos, Switzerland. [...]

I sincerely hope Dell continues to focus on its core business and stays away from making or selling cell phones. There is limited to no up-side for the company and the odds of failure are high.
Brian Marchant-Calsyn