The Dell smartphone rumors have resurfaced, this time with a little more credibility. The Wall Street Journal is reporting that Dell plans to introduce a smartphone based on Google's Android operating system and running on the AT&T network.
The Journal cited "people briefed on the plans" as revealing that a Dell smartphone could hit the market as early as next year. A Dell Android phone would be AT&T's first to use the emerging mobile operating system and also would be Dell's first smartphone.
"It's always hard to handicap mythical products, but the Android market is getting very crowded with some of the best-of-breed Android devices coming from companies like HTC," said Michael Gartenberg, a vice president at Interpret. "If Dell plans to get into the market, they are going to have to find some significant way to differentiate their offering and leapfrog ahead of their competition."
Late To the Game
To be sure, Dell is late to the smartphone game. What's more, Dell hasn't demonstrated the core competencies of smartphone manufacturing. For Dell to succeed in an already-crowded market dominated by less than a handful of players, the PC maker needs an aggressive, differentiated strategy, Gartenberg said.
Dell's strategy, as the Journal describes it, is to offer a device that is somewhat similar to Apple's iPhone, with a touchscreen rather than a keypad, and a camera. Dell showcased a phone in China in August. The Journal reports that the new device is similar, but has different features.
Dell is reportedly also talking to other wireless carriers, including T-Mobile, about offering the device. Dell does have some carrier relationships through which it sells netbooks, but analysts said getting into the smartphone market is a much different game.
"As phones become more like little computers, the PC background can help, but it can hinder as well because you may apply a PC mindset to something that functionality-wise isn't a PC," Gartenberg said. "A phone is much more than a stand-alone device. It's part of a larger ecosystem, and Dell is going to have to demonstrate that they understand that ecosystem."
Dell Is No Apple
In the past, Dell's efforts to branch into other spaces have not panned out well. For example, Dell attempted to take on Apple and the iPod with various versions of a portable media player. The effort largely failed. Dell was also in the PDA marketplace and then retreated.
Gartenberg said Dell should be looking at competitors such as Helett-Packard, which has been in the smartphone arena for years and hasn't dominated. Dell would be wise to learn some lessons from HP and understand what it takes to play in a crowded market with entrenched players.
"Dell is fundamentally different from Apple. Launching a single phone with a single carrier is not that big of a deal. Launching a phone that can evolve into a family of devices successfully with a carrier is a huge issue," Gartenberg said. "We'll have to wait and see how Dell's device looks, particularly when you are talking about Android and the necessity to make your Android device stand out from all the other Android devices on the market."