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A new report from analysis firm Pund-IT spells out why China and a Dell smartphone – which is mostly still just rumors, as Dell has yet to officially release details on the Mini 3i – could be a perfect fit.
Charles King, author of the report and Pund-IT’s principle analyst, says it’s relevant to consider data that Dell pointed to in the fall, when it celebrated its first decade of business in China.
“Dell referred to research suggesting rapidly spiking PC and online usage in China. The country’s online population has grown by an estimated 43 million users since 2007, and Chinese users bring some 185,000 new blogs online every day,” King wrote.
“More impressively, in 2006, China’s 54 million PC users ranked third … globally, but that number is expected to increase more than ten-fold, to some 547 million – nearly double the estimated number of U.S. users – by 2015,” King added.
Dell has physically expanded it business in China, explains King, with facilities and service centers. In 2008, Dell reportedly purchased $23 billion in parts and components from partners and suppliers in China, and in addition to creating approximately 2 million jobs, each year it contributes $50 billion to China’s gross domestic product.
“What does any of this have to do with [Dell’s] smartphone efforts? Quite a bit,” King wrote. “China has the world’s largest mobile phone market – with well over 500 million current subscribers – meaning that Dell is heading into a well-establish and highly competitive market. But the company’s partnership with China Mobile and its existing retail channels and partners should allow it to get up and running faster than many believe.”
While many of China’s cities are ahead of the IT curve, 3G networks are not likely to become available until 2010, which King points out could work to Dell’s advantage, “allowing it to piggyback sales as 3G deployments take off.”
Also working on Dell’s side is the continued popularity of the Google Android OS, which the Mini 3i reportedly runs. With the opportunity of so many users to create for, developers are sure to be drawn to the China market.
And finally, Dell seems to have “notable traction” in China, King wrote. It has seen year-to-year revenue growth of 33 percent and unit sale increases of 38 percent, which is nearly 2.5 times better than what other vendors have experienced collectively.
“Bottom line … we believe [Dell] is better positioned to compete and succeed than many may expect or believe. This is not say that such efforts will not be challenging. But working with China Mobile does not represent something entirely new for Dell,” wrote King.
“It is simply the next, natural, evolutionary step forward in a market the company fully understands.”