Dell to Consider Entering Smartphone Market

It seems that the worldwide leading PC maker Dell is on its way to release a smartphone as well. According to some analysts, Dell is expected to announce such a device at the 3GSM or the Mobile World Congress event in Barcelona next month.

“The exact timing of Dell's launch is not clear but our sources indicate it is closer to reality than before,” says Shaw Wu, an analyst with Kaufman Bros. in a research note. “We believe it is likely inevitable that Dell enter the cellphone space given the cannibalization of PCs by smartphones and highly functional mobile devices.”

According to the analyst, the computer maker has had an eye on the mobile phone market for over two years now, and it is also stated to have been in talks with component suppliers and manufacturers. The market Dell would be aiming at is a rather competitive one, with makers like Apple, RIM and HTC releasing new touchscreen devices, while phones like the iPhone 3G or the newly announced Palm Pre being considered some of the best available.

On the other hand, Dell is said to believe that there might be enough room for all developers. The smartphone segment is a rather fast growing one, with over 14 percent of the market captured last year, and 258 million units sold. For this year, previsions point towards almost 725 million units to be shipped. Analysts say that Dell is expected to make a move into the area: “It wouldn't surprise me to see them do this,” says Ryan Reith, an analyst with IDC. “This is such an enticing space that if you do it correctly you can be in a huge growth market.”

Back in 2007, Ron Garriques, a former Motorola executive, was hired by Dell as president of its consumer business segment, which started a wave of rumors regarding the company's entrance on the smartphone market. “It's been two years since Garriques was hired which leads me to believe that Dell could be ready with something outside the PC space,” stated Reith.

On the other hand, Dell would have to surpass a great deal of barriers before being able to come with a handset to the market. ”Cellphones are really hard to make,” says Julie Ask, principal analyst at Forrester Research. “It's not like a PC where it is all commodity and design doesn't really matter. Why would anyone want to buy a phone from Dell?”

According to some voices on the Web, Dell would have to get the right blend for its phone to have a chance on the market. Some even suggest that it should be a device able to compete with handsets like the Palm Pre, iPhone, G1 as well as others.

Dell did not comment on the news story.