Log in

View Full Version : Dell aims at volume consumer market

Andy Sjostrom
07-03-2002, 08:57 AM
<a href="http://www.digitimes.com/NewsShow/Article.asp?datePublish=2002/07/02&pages=01&seq=2">http://www.digitimes.com/NewsShow/Article.asp?datePublish=2002/07/02&pages=01&seq=2</a><br /><br />This article provides some rumorous, unconfirmed information about the bidding to put Dell on the PDA bandwagon. It looks like Dell is aiming for a retail price below $300, which would position their Pocket PC in a low-end volume market. I sincerely welcome that approach, since we have zero players there. The article names iPAQ maker High Tech Computer (HTC) as well as Wistron, Compal Electronics and Mitac International as bidders. Bidders are said to have backed off initially because of the low margins a sub-$300 device would bring.<br /><br />Is it possible to build an attractive sub-$300 Pocket PC, that can sell in volume and not getting a bad rep for low quality? What would its specifications be, do you think? (Thanks to Michael van Oosten and Duncan for the link!)

07-03-2002, 09:20 AM
Dell have been arrogant - pure and simple! Waiting around while everyone else builds up the market then asking other companies to do all the thinking for them on this Pocket PC - not a good way to do business.

Yes - I know Dell are huge! But Michael Dell has poured scorn on every new idea that's come along - and then promised people only what his company does already! 'Decline and Fall of the Dell Empire' - coming to a bookshop near you in, say, 3 years...

07-03-2002, 10:42 AM
looks like their having problems:


Andy Sjostrom
07-03-2002, 10:59 AM
Oh, please! Not another Register article...

07-03-2002, 01:38 PM
Before we get into character assaination....

Here's what I'd like to see in a $300 machine.

* Screen
3.5" to keep down cost - Cleartype compatible.

* Memory
32MB minimum - 64MB if at all possible

* Expansion
Multiple SD card slots (2 minimum) to cover Bluetooth, WiFi (Soon)
CF would cost too much in size/cost/complexity of build

* Case
Keep it small - small border around display.
Plastic is fine. I have my iPaq in a leather case at all times.
Make buttons a simpler touch panel rather than physical buttons.
Add a side mounted scroll/select/cancel controls.
Integral screen cover would be nice.

* Battery
As larger a capacity as you can make...

XScale running at 200+MHz

* Remove IR, and MIC (Microsoft may complain... so make them an add-on).

Just my 2c

PS. This is being typed on a very nice DELL laptop.

Speed Racer
07-03-2002, 02:37 PM
At this point I think a low end PocketPC should have the following:
* 3.5" 4k color reflective screen
* 1000 mah battery
* Low end x-scale chip running at 200 mhz
* 1 SDIO slot for expansion
* 4 hard application buttons, record button, and a 5 way cursor button to meet PocketPC standards
* Built-in speaker and microphone to meet PocketPC standards

IMHO a low end PocketPC should not have all of the bells and whistles of the higher end models (i.e. 64k color transreflective backlit screen, dual expansion slots, higher capacity battery, WiFi, Bluetooth, GPRS, etc...) but it still needs to meet the minimum PocketPC specs.

07-03-2002, 02:54 PM
I'd say the size and specs of the Toshiba e310 are the minimum requirements. With retailer discounting, I think that price could get close enough to $300 that something less of a machine than that would not be accepted well.
I think 206MHz StrongARM would be fine on a first offering, if it arrived by the end of the year. Xscale excitement is over until units with new version OS come out.

07-03-2002, 02:55 PM
Duncan! Never knew you had such harsh feelings towards Dell - you are right on innovation, but there is a certain strategy that Dell has used to exploit the market and that has to be applauded - whether you like Mike or not;

They sit and wait and watch and then pounce - and when they pounce they usually (more than othrs) have their act together which is more than others can say (and do).

Having said that I would put a new device like this at where HTC's o2 device is now - without the phone edition of course.

Dell is known for their configurability - build your own system - so I would certainly start with a base and then allow for increased internal memory, upgrade to a X-Scale and upgrade to a higher screen quality...

Still waiting for the LOOX... *sigh* :?

07-03-2002, 03:39 PM
Can you say Audiovox Maestro?

Sub $300 that rocks!


Foo Fighter
07-03-2002, 04:52 PM
...then asking other companies to do all the thinking for them..[snip]...not a good way to do business.

Well, this is exactly how the notebook PC market works! Dell doesn't build PC portables, no PC maker does. They are all designed and built by Asian firms...usually Taiwan based companies like HTC and Wistron. In fact, Dell's Inspiron models are built by the same company that builds Apple's iBook.

I often laugh whenever someone claims that Dell's laptops are more reliable than a Compaq, when in fact they are made by the same manufacturer.

Foo Fighter
07-03-2002, 04:55 PM
Can you say Audiovox Maestro?

Sub $300 that rocks!

The Maestro is under $300 because it has been discontinued. It originally sold for $499.

Jason Dunn
07-03-2002, 05:08 PM
I often laugh whenever someone claims that Dell's laptops are more reliable than a Compaq, when in fact they are made by the same manufacturer.

Keep in mind, dear Foo, that an ODM/OEM will make the device uses the components selected by the buyer (Dell) and can make expensive, top-end products, or cheap, bottom-end products. Compaq may chose cheaper, less stable components, and the ODM/OEM will build it. Dell may choose more expensive components and thus end up with a better overall product. It's not as straight-forward as you think. 8)

Foo Fighter
07-03-2002, 05:16 PM
I was referring to the build quality, not component choice.

Of coure the parts make a huge difference. Apple is using a 66mhz system bus on the iBook! PC notebooks haven't used that bus speed since 2000. 8O

07-03-2002, 06:27 PM
It is absolutely possible to build a Pocket PC device for under $300. The question is, what will the feature set be, and how will it be sold?

After many, many months of trying to raise financing for our company, we gave up trying to produce a Win CE multimedia player just last month. I can speak with some certainty about quantity component pricing, Win CE & Pocket PC licensing costs, certification & testing costs, manufacturing costs, and margin losses through the distribution chain.

There are really only two ways for Dell to sell this device : Direct (web) and indirect (through other retailers). If Dell chose to sell through indirect retailers, they would likely lose between 12% and 50% of the retail price to the retailers. The low end (12%) would be for small to mid-sized online retailers, and the higher end (50%) would be for large physical retailers (Best Buy & Staples, specifically).

So we have three numbers to work with, $300 (Dell direct), $264 (online 3rd party retailers), and $150 (large physical retailers). You can see that the device options for these three points will be quite different. Dell will of course, have some minumum margin it would like to make, so you can chop some more off of these numbers. For argument's sake, let's say Dell wants a 5% margin (fairly healthy for hardware, actually). The bottom line numbers are now $285, $249, and $135.

For $135, Dell would be fairly limited in the features it could include. The 400 mHz X Scale is too expensive, as is a large color screen (3.8" 320X240 65K screens are running about $50). Dell might consider a 2.8" color screen (~$40), or a 3.8" monochrome ($30). The likely processor choices would be the venerable ARM 206 mHz ($18 ), a NeoMagic or Cirrus, or an AMD Alchemy processor. The AMD is available up to 500 mHz, but alas, this speed is too expensive - only the 300 mHz is cheap enough. Ram is also obviously a consideration, but the true costs here is far lower than you might think. Try $5 for a 64 MB chip in Dell-scale quantities. ROM is a bit more expensive, $12 for 32 MB. The battery would likely be Li-ion, as prices have really cratered recently. Probably a 1700 mAh from Ultralife (cheaper than the iPaq's Danionics unit, and Dell probably wouldn't want a Sony Fukushima unit, despite the cost/performance advantages), for $7. Bluetooth and Wi Fi are most definitely out ($25+ for BT, similar for Wi Fi)
All in all, here's what this unit would most likely look like :
ARM 206 mHz
64 MB Ram
3.8" Mono 240 X 320 screen
1700 mAh Li-ion internal battery
CF II slot
USB 1.0 connection

I'll skip the analysis for the $249, Dell direct & 3rd party online retail model, as it will be similar to the Dell drect only model. Loss of BT or Wi Fi is very likely from the $285 model.

For $285, Dell could ship a very competitive unit. Without large margin losses to outside retailers, the options quickly pile on. This unit would likely have specs similar to the device I worked to bring to market. Here's my stab at the specs :
400 mHz X scale (no one is buying anything other than 400's, so the prices are skewed)
3.8" 320 X 240 65K color screen (the Sony screen is too pricey)
64 MB Ram
1700 mAh Li-ion battery (may be smaller if the case is thin & svelte)
USB 1.0/2.0 cradle connection (USB on-the-go from TransDimension may fit in the budget)
Wi Fi (Dell hasn't shown much interest in BT yet)
CF II slot
SD i/o slot

Something to consider is the timing of all this. Dell seems keen on HTC as an assembler, which is an intelligent choice. I believe they would be wise to strongly consider BSquare as a hardware developer, however, for time to market reasons. If Dell chose design & manufacturing partners quickly and initiated design by August 1, they could throw $300K - $800K at the hardware and have first-article units ready to show at CES. It might be a real push to have polished, working units on hand for COMDEX. By the time Dell gets a product to market (Christmas is a large and inviting target, but the window may have already closed), the 2nd generation X Scale devices will be hitting the market, so some thought must be put into 'what feaures will these 2nd gen devices have, and how close will they be to our $300 target?'.

I for one would be more than happy to give Dell $300 for a polished Pocket PC to match my desktop and laptop.

07-03-2002, 06:32 PM
Plus the US firm can do the enginering on the products as well. Or at least make changes in the design. The US firm can also provide quality assurance people at the factory to insure that all products meet minimum requirements.

The more you let the OEM handle all aspects of the production, the less reliable of a product you will get.

07-03-2002, 06:49 PM
Dell are a good company - high quality etc. - but Michael Dell's 'stick in the mud' attitutude will see hime get unstuck as the market starts to take previously unimagined forms. Dell risk being left behind. This Pocket PC business is just one symptom.

Possman - to a point Dell was playing the right game - but the rules have changed and refusing to acknowledge that won't help him any. Once I considered him to be a figure to admire - now, well he risks becoming a bit of a joke quite frankly... Harsh maybe - only time will tell if I judge him right...

07-03-2002, 09:28 PM
I sure hope Dell can deliver a $300 device. I'm beginning to think a lot of manufacturers do find the PDA enthousiast an idiot....not knowing how to spend his cash. Today the Toshiba devices appeared in some Dutch online stores for pre-ordering. The WiFi model for 920 EURO (1 euro is almost 1 US dollar) The BT version for 885 Euro and the model without WiFi or BT sells for 790 Euro.......making the Toshiba the most expensive PDA in the Netherlands. Looking at the US prices for the new iPaqs (up to 750 US dollars) the iPaq could become the first PDA in the Netherlands costing more than 1000 Euro.

07-04-2002, 05:13 AM
A sub-300 PPC is a great idea to head-to-head with low-end Palm devices. But until ActiveSync works without fail and is easier to configure, the consumer market will kill the product. Both the Blackberry and Palm I have kicking around sync better than my Jornada.