Smart move for Dell (DELL) to bail on its iPod competitor. But where the heck are its smartphones?
As the WSJ reported this morning, Dell is not launching a “digital music player tied to online entertainment software” that it had hoped to release before Christmas. Good! That market is pretty much done growing, and Apple owns it from top to bottom.
But that’s not to say Dell has no business making portable consumer gadgets. We once owned a Dell Axim PDA, and besides its crappy Windows CE software and weak battery life, we liked it a lot.
So we can’t help but wonder why Ron Garriques — brought in from Motorola (MOT) to lead Dell’s consumer group — hasn’t pushed Dell hard into one of the few markets that’s actually growing like a weed: The smartphone industry. Specifically, we think Dell could do a pretty good job selling mid- to high-end smartphones running Google’s (GOOG) Android operating system. (Or, if it insists, even Microsoft’s Windows Mobile.)
Earlier this year, Citi estimated that the smartphone industry would grow 50% to 60% annually in the next few years. At the time, Citi expected smartphones could account for 22% of the handset market next year, almost triple their 8.5% share in 2006. Those numbers could easily drop a bit thanks to the crappy economy. But need we remind you that Apple (AAPL) shipped almost 7 million iPhones last quarter — just a year after they entered the market? And that the $200-$300 iPhone outsold the free-to-dirt-cheap Motorola Razr last quarter?
So Dell, get on it. You’ve seen the Google-powered T-Mobile G1 — there’s a lot of room for improvement, both software and hardware-wise. And if you could make those sexy Axims in 2004, there’s no reason you can’t do as good a job selling Android phones in 2009-2010 as Motorola, HTC, or anyone else.
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