10-14-2003, 11:08 PM
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Executive Editor
Join Date: Aug 2006
Posts: 29,160
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"Dell Backs Away from Smartphone Plans" - The Register
"Dell has backed away from its smartphone plans, outlined last summer, and ruled out any attack on the handset market, despite its overall ambition of becoming a consumer electronics major. Chief operating officer Kevin Rollins said this week that the presence of Nokia would make handsets a difficult market to break into and that the sector is less attractive than other consumer devices because so much profit and balance of power goes to the mobile operators.
The comments came against a background of a major push into the consumer market by Dell, with Rollins claiming he is after market share of 30-40% in the main sectors where the company will operate. Clearly, such a share would be impossible to achieve in handsets. Dell�s success in PCs � where it has 17% market share worldwide � is based on its direct sales model and legendary supply chain efficiencies. This could not be replicated in mobile phones � although there are direct sales, the role of the carriers in the route to market is critical; and unlike the inefficient PC industry that Dell entered, the mobile phone business is very lean, and Nokia could give Dell a run for its money in competing for the prize for supply chain efficiency."
An interesting article to be sure, but I don't know that I agree with the implied statement that the mobile phone market is efficient. The carriers are notoriously inefficient when it comes to bringing handsets to the market, and this is something that's dragging the whole industry down. Dell might have figured that out and realized any profits might have been eaten up by the slothful carriers.
This is also the reason we're seeing a mix of Smartphone 2002 and 2003 device on the market - Orange will be releasing the E200 with 2003 on it this fall in their EMEA markets, AT&T will be releasing the Motorola MPx with 2002 on it, and in China we have Smartphone 2003 devices. What a mess! The cause? I believe it's the carriers - it takes most carriers over six months to certify new handsets for use on their networks, which is a huge delay considering how fast new devices are coming out. And when you consider the frequency of software updates that Smartphones are likely to have, the scenario gets even worse as carriers drag their heels with testing on even the most simple software updates. As of last week, I learned that Microsoft had already released the Smartphone MSN Messenger update, but it's in the hands of the carriers now - and who knows how long it will take for them to release it? An ugly scenario all around.
Hopefully the carriers will streamline their "time to market" process and give hardware and software makers some incentive to innovate.
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