Putting an end to speculation over the past two years, Dell Inc. (DELL) on Friday confirmed plans to enter the lucrative, but competitive smart phone business. The company announced partnerships with China Mobile Ltd. (CHL) in China and Claro in Brazil as the first two supporting mobile operators to sell Dell Mini 3 smart phones.
Dell said that the initial Mini 3 smart phones are designed around Google Inc.'s (GOOG) Android operating system. The company did not release technical specifications for the Mini 3, but said details of phone models will be announced on a partner-by-partner basis when devices are available in stores, anticipated in late November for China Mobile and year's end for Claro.
China Mobile is the largest telecommunications company in the world with more than 500 million customers. The has a registered capital of RMB 51.8 billion and assets of over RMB 700 billion.
Claro, which serves more than 42 million people in Brazil as part of the America Movil network , one of the five largest wireless telecommunications groups in the world. In November 2007, Claro initiated its operation of third generation services, or 3G.
Ron Garriques, President of Dell Global Consumer Group said, "Our entry into the smart phone category is a logical extension of Dell's consumer product evolution over the past two years. We are developing smaller and smarter mobile products that enable our customers to take their internet experience out of the home and do the things they want to do whenever and wherever they want."
A spokesperson for China Mobile said, "We are excited for Dell to be among the first manufacturers to introduce new technology based on the OPhone platform. We look forward to working with Dell as it brings innovative new products and services to add value to our customers' lives."
João Cox, president for Claro, said, "As a leading innovation company in Brazil, Claro is proud of being the first wireless carrier in the world offering the 3G version of Dell's smart phone. This confirms the Brazilian market strength and Claro as a leading actor in introducing new technology products and services to the country."
The first Mini 3s to be sold in China will not have Wi-Fi due to an earlier government ban on the technology. However, the device is expected to offer a full complement of music, games and other downloadable content.
With the downturn in the economy, technology companies are having a turbulent time as consumers and business held off buying new technology. Dell now sees services as a source of potential growth. In September, the company acquired Texas-based Perot Systems Corp. for $3.9 billion as part of a strategy to challenge its top rival, Hewlett-Packard Co. (HPQ) in the IT services market and to expand beyond its own PC business. Hewlett-Packard acquired Electronic Data Systems earlier this year.
Also, with the lines between mobile phone and portable PC beginning to blur - with more and more devices supporting downloadable applications, multimedia, Web browsing and PC-derived operating systems - hardware vendors see the trend as an opportunity to add a new revenue stream by leveraging their core backgrounds in computer hardware.
Speculation about Dell's move into the smart phone market has been around for a few years now. In 2007, Dell hired Ron Garriques, a former Motorola executive known as the force behind the RAZR phone, as president of its consumer business. That further triggered speculation about the company's plans to enter the smart phone market.
Dell's entry into the smart phone category reflects the company's continued expansion into mobile internet products and services, and adds to the rising competition in one area of the personal technology market that continues to show signs of growth. The success of Apple Inc.'s (AAPL) touchscreen iPhone has prompted other technology companies to enter the lucrative smart phone market.
Apple began selling the basic iPhone model in 2007. It launched iPhone 3G in July 2008 and iPhone 3G S in June this year. The device proved to be extremely popular and has become a cash cow for Apple. Riding on iPhone's success, Apple reported a 47% rise in fourth quarter profit in October. The company said it sold 7.4 million iPhones in the fourth quarter.
However, Apple is facing stiff competition in the smart phone market from Research In Motion Ltd. (RIMM, RIM.TO) and Palm, Inc. (PALM). In June, Research In Motion introduced the BlackBerry Tour, a new 3G smart phone, and Palm launched its new Pre touch-screen phone. In September, Palm also unveiled the Pixi, the Pre's smaller, lighter cousin.
In August, media reports had said that Dell was developing mobile devices for China Mobile to mark its entry into the smart phone market. China Mobile reportedly showed off a model of a Dell smart phone running Google's Android operating system. The 2G phone sported a three-and-a-half inch high-definition screen and used a touch-screen keyboard instead of a physical one. The device also came with a 3.2-megapixel camera, microSD memory card slot, GPS, Bluetooth and 950mAh battery.
The Mini 3 smart phones to be sold in China are expected to support applications from China Mobile's online store and be part of China Mobile's forthcoming Ophone line. The China Mobile online store, the Mobile Market, was launched in July 2009. The Mobile Market supports devices from companies such as Nokia Corp. (NOK) and Samsung Electronics. The iPhone is sold exclusively by China Mobile's smaller rival, China Unicom Ltd.
Earlier this year Dell was the first mobile PC manufacturer to embed China Mobile's 3G technology and services into its netbooks. Dell also has existing agreements with other telecom providers, including Vodafone in Europe, Australia and New Zealand, AT&T Inc. (T) and Verizon Communications Inc. (VZ) in the U.S., M1 and Starhub in Singapore, and Maxis in Malaysia.
Dell has not yet announced when the phone would reach the U.S., although earlier reports have said that the company expects to launch the phone in the U.S. next year. According to reports, the Federal Communications Commission has recently approved a more advanced version, the Mini 3iX, which includes Wi-Fi and 3G mobile broadband, two features that are absent in the models to be sold in China.
According to research firm Gartner Inc., smart phone sales are slated to surge by 29% year-over-year to 180 million units this year, surpassing notebook PCs in total unit terms. Currently, smart phones now account for 14% of all mobile device sales, smart phones are expected to account for 37% of worldwide handset purchases by 2012 , Gartner said. DELL closed Thursday's regular trading session on the Nasdaq at $15.45. In Friday's pre-market trading, the stock has been trading at $15.60, up $0.15 or 0.97%. In the past 52 weeks, the stock has been trading in a range of $7.84-$17.26.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.