Dell needs a hit, and the company is betting that it will come in the form of small screen devices. The question is whether it can make a smart phone or mobile Internet device you’d want to buy, not just one carriers might want to stock.
Yesterday Dell’s shares dropped 8 percent on the news that it saw more pressure on profit margins ahead. Recognizing that business customers will likely continue to keep those purse strings tight, Ron Garriques, president of Dell’s consumer business, said in a presentation to analysts that he saw an opportunity in “4-inch, 8-inch, 10-inch, and 12-inch displays” that all worked together. Are we talking about the cloud? Some sort of sync software? Both? Dell already makes the 10-inch Inspiron Mini 10 and a 12-inch version–netbooks that have received lukewarm reviews from us–so the most intriguing part of the above statement are those 4- and 8-inch devices. Will the 4-incher be a phone or just a Wi-Fi-only gadget? Since Garriques went on to say that Dell would engage with the top mobile operators and “see what their needs are,” I’m inclined to believe it’s a phone. But that line of thinking makes me nervous. The reason the iPhone has been a smash hit is because Apple didn’t think about the carrier first; it made a device people wanted to use and carry and basically got AT&T to carry it nearly sight unseen. (Verizon apparently passed.) It’s true that Dell needs the major carriers more than they need them, but if the company merely delivers an empty vessel to pimp the mobile operators’ services, it won’t be a differentiated product. And rumors have been swirling since March that service providers rejected the Android and Windows Mobile smart phones Dell showed them because they were too dull. The 8-inch device could very well be a touch product, maybe one that’s optimized for Android or Windows 7. It could be sold through carriers, retailers, or both. And Dell already has a little touch experience under its belt with the Latitude XT Tablet and Dell Studio One desktop. However, the company hasn’t made a portable touch device for consumers since its Axim PDA (remember that?) What Garriques (which hails from Motorola) and his team need to prove is that they understand that smart software matters just as much as slick hardware, and that they can concoct a user interface on the order of HTC Sense or web OS. In other words, Dell needs to demonstrate that it can deliver a user experience that delights and surprises not only the carriers it’s attempting to court but consumers. It’s time to build on the Dell Dock and show us what you can do.