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Dell decides not to sell Microsoft smartphones, but it is NOT a setback for Microsoft smartphone platform, not a setback at all October 14, 2003 [MS Smartphone] | By anonymous 1. A couple days ago we were reporting from Switzerland, that Samsung has dumped Microsoft smartphone platform. Now the news are coming that Dell has dumped, or rather "decided not to sell", the Microsoft smartphone devices in any time soon. You donīt know what to make out of this? Well, we will tell you... First of all you need to understand what is business model of Dell: the model relies on direct sales and on "economy of scale" effect (meaning: big production size reduces costs). So now Dell is saying that it will not enter the cell phone industry - it has not much to do with Microsoft smartphone or Symbian or any such stuff. They simply decided that they are not entering handset (cellphone) market, because Dellīs chances to gain satisfying market share are very low. And for Dell 2 conditions must be met to enter given market: 1. volume of expected sales must be huge, 2. Dell must be in the position of getting significant, double digit market share in this market. Letīs take a look at Tablet PC market: Dell is not making the Tablet PC notebooks at all, because although it could gain big market share easily in this Tablet PC market, Dell realizes that this market is still very small - Tablet PC notebooks are not catching up because people can get for the same money "non-Tablet PC" but with much better specifications. So as you can observe above the only reason why Dell is not entering cellphone industry is the fact that it is convinced that it couldnīt attain any significant market share. So why Dell cannot gain significant market share in the cellphone industry? 2 main reasons are: 1. strong existing competition, 2. "direct sales" business model of Dell does not fit well in cellphone industry where cellular network operators are at play and without deals with operators almost nothing can be done. Even Nokia relies heavily on deals with operators - and it even uses its various departments to get an edge over operators (for example Nokia says to some operator: "we will not sell you early this new handset if you will not buy from us this specific piece of network infrastructure"). Dell has direct sales business model and no deals with operators. Dell has no edge over operators, and no way to convince them to cooperate and to start selling Dellīs cellphones. Decision of Dell not to sell Microsoft smartphone (or any other cellphone for that matter) is therefore not a setback for Microsoft smartphone platform. It would be if Dell would decide to sell cellphones but would use for example Palm OS instead of Microsoft smartphone platform. If Dell is not entering cellphone industry at all then it is not a problem and not a setback. Anti-Microsoft propaganda of some "analysts", that "loss of the Dell program will be a blow to Microsoft" is therefore false because based on false premises. And make no mistake: Dell is not withdrawing from Windows Mobile at all! The contrary is true: Dell is releasing in coming weeks the new Axim Pocket PC devices:  ... that will feature built-in Wi-Fi, will be much smaller and, as always at Dell, very cost effective (they will be one of the cheapest PDAs with built-in Wi-Fi on the market). Even if Dell has decided not to sell cellphones powered by Microsoft smartphone platform yet, it is only a question of time when Dell will release cellphones based on Pocket PC platform - a natural extension of the Axim line. So truly there is no reason for celebration for Symbian fans. No reason at all.   Post your comment (free registration is required to post, but if you register you can edit your posts later)
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