Despite a shift to IT services, Dell is looking to sell lots of PCs both in the United States and abroad. The company is also eyeing a different approach to smartphones and tablets.
AUSTIN, Texas - When it
comes to the burgeoning world of smartphones and tablets, Dell isn't looking to
become the market leader anytime soon. However, the company is trying a
different approach to this market by targeting business users instead of
consumers.
For years, Dell grew its business on
the backs of clients, specifically PCs and servers. While Dell always offered a
mix of consumer PCs-a portfolio that has been revamped in the past 18 months-the
company focused on selling desktops and then notebooks to enterprises, large
businesses, local, state and federal governments, educational institutions and
health care providers. And for the most part, that strategy worked. IDC in
April said Dell was the
second-largest
PC vendor in the world in the first quarter, behind rival Hewlett-Packard.
Now, Dell is looking to focus on both
the smartphone and tablet markets with the same approach. During the company's
June
29 investor conference here, Jeff Clarke, Dell's vice chairman for global
operations and end-user computing, told analysts that the company plans to
target "prosumers"-those who use the same technology for work and for personal
use-and business users.
However, Dell is not solely focused on
devices. Indeed, the company has only released a handful of smartphones and one
tablet-the
Android-based
Streak-and most of these have been offered overseas. Dell executives also
confirmed that the Streak 10 Pro, which will also use Android, is launching in
China first before the United States.
Still, by targeting prosumers and
business clients, Dell is hoping to sell additional services and software on
top of the actual devices itself. Or, if customers want to stick with a more
traditional BlackBerry or even an iPhone, Dell can still sell services, such as
mobile-device management, security and data management.
"It really is about participating in
the growth markets," said Clarke. "It's about participating in the growth
markets in the mobile space in a very, very different way. It's not about being
another consumer player in smartphones and tablets. It's about taking our
company's core strength in the middle market. It's about targeting our tablets
and smartphones for those usage models. It's about building a set of solutions
and services around that, and that includes device management, security
management."
Overall, Clarke wants the customers
totally connected to Dell from the smartphone and tablet, through the PC and
into the data center with the company's servers and storage. This strategy also
allows Dell to sell its data center technology to those telecommunication and
other businesses that have to support all the data that these mobile devices
are generating each day.
The day before the conference began,
CEO Michael Dell echoed those same sentiments during an informal discussion
with analysts.
"We are very much focused on that
business and offering a total solution to customers not just devices," said Michael
Dell. "We're looking to offer systems management, application development,
security and other types of integration."
To make sure the world knows it's
serious about this plan, Dell began trading in its BlackBerry devices early this year
for its own Venue Pro smartphone, which runs Windows Phone 7. Almost all Dell
employees in the conference here had one.
Indeed, Dell doesn't have much a stake
in the growing smartphone and tablet markets to warrant a big device push right
now. In April, ABI Research estimated that Apple's iPad controlled about 85
percent of the global tablet market, with Samsung a distant second. Right now,
the Android tablet market, which includes Dell, remains fractured.
A better indication of what Dell might
do in the tablet market may come next year, when Microsoft releases Windows 8,
the next version of its operating system that is optimized for tablets and can
run on ARM-based devices.
"I think [Windows 8] will help in
tablets," said Dell. "I think there is a large user group of Windows users
looking for a tablet."
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