Dell's Android Smartphone Success a Matter of Managing Expectations

Dell is rumored to have a smartphone in the works that AT&T may have its eye on. Analysts agree that the move to smartphones, and the choice of Android, make sense for the PC maker.

Dell is rumored to be working on a smartphone that will run Google's Android operating system. According to a report, it's also expected to be AT&T's first Android device, though whether it would be exclusive to the carrier is unclear.
It would be Dell's first smartphone, though the path from computer maker to phone maker is a well-established one, already tread by Acer, Apple and Hewlett-Packard - though HP the least successfully.
Steve Baker, an analyst with NPD Group, points to these computer makers that have already made the transition as a sign of where the industry is headed in the coming months.
"The cell phone is more and more becoming a tool for business people and a key tool people are using to manage their lives and surf the Web and everything else," he told eWEEK. "It's logical for PC OEMs to go into smartphones."
Dell was said to be working on a smartphone in March, that according to Kaufman Brothers analyst Shaw Wu was rejected by U.S. carriers for not being distinct enough. In August, it was reported that Dell had debuted the Mini 3i, an Android-running smartphone for distribution in China, at a technology show in Beijing. During Dell's most recent quarterly revenue announcement, however, Brian Gladden, Dell's chief financial officer dismissed the China Mobile device as just a "prototype" Dell had presented.
When pressed for details, Gladden responded:

"We showed a proof of concept prototype at the event with our partners China Mobile, who obviously we've had a relationship with. We've sold netbooks that are broadband-enabled. And we really don't have any further details to share at this time. We will continue to explore opportunities across multiple screen sizes, we've said that. From our standpoint, it's a natural extension of what we do. ... From our standpoint, we're spending an awful lot more energy on the enterprise side of our business than launching phones."

It seems Dell may now be ready to put more energy into phones, and that Android could help offer some of that previously missing distinctiveness.
"They have an established brand, and if they make a good product and target it properly, there's no reason they can't do well," said Baker.
Dell's intentions, however, are so far unclear. "Are they planning to be more consumer or more enterprise focused? How are they going to mesh it with their other abilities?" Baker added. "[To be successful,] they have to find what makes their products unique in this space, and how they're going to take advantage of what it is they bring to the market."
Ken Hyers, an analyst with Technology Business Research, thinks a Dell smartphone will for sure target consumers. "They're signaling that very clearly by going with Android instead of Microsoft. And I think that's a smart move. [On their first attempt,] they don't want to compete with RIM, which is the gold standard for the enterprise," he told eWEEK.
But that's not the only reason for choosing Android, he explained. The open-source Android has no licensing fees, which is appealing, and the roster of applications for the OS is quickly growing in the Android Market.
"It's also the newest smartphone OS for mobile. Which means that it's able to take advantage of a lot of new features, like multitouch, and to get the most out of features like the accelerometer. Having all of these in an OS that's also easy to develop for all makes sense for Dell," said Hyers.
Baker adds that whether or Dell succeeds is a matter of managing expectations. "It's not like they're out to challenge Nokia," he said.