More apathy for a Dell smartphone
May 1st, 2009 | by Mobile Data Group |It’s hard to tell if anyone is as enthused about the possibilities of Dell making a smartphone as Michael Dell.
He’s been making periodic references to his company making “small screen” devices in the near future at public appearances for the last year. But the people who watch his stock and analyze his company’s every move, appear incredibly underwhelmed by the idea of a Dell handset. Their apathy is notable since a) Dell’s last handheld device was very popular with consumers and b) Dell hasn’t formally announced anything specific.
While getting into the smartphone-making business is not a terrible idea, seeing as how the PC market is pretty pitiful right now and smartphone sales are soaring, how Dell goes about manufacturing, selling, and marketing such a device is important. Even the slightest misstep could undo the progress the company has made in turning around its business.
Again, Dell has not made any official announcement of a specific product. But the frequency or rumors about such a device is increasing. The latest appraisal came Tuesday from Bernstein Research analyst Toni Sacconaghi Jr., who said that while there’s potential for Dell to make some decent profits from a good handset–which could arrive “in the next six months”–he’s not convinced Dell’s execution will be all that graceful.
The company’s track record in making devices other than PCs is “uninspiring,” he wrote in a research note. “From an investment perspective, we do not believe it is appropriate to give Dell any credit (nor deduct any value) for its smartphone business. We’d rather take a wait-and-see approach.”
In other words, Dell investors aren’t ready to toast Michael Dell’s smartphone just yet. There are plenty of reasons for them to be skeptical, chief among them being the company’s ongoing restructuring and realignment of its core business. Sacconaghi points out that the smartphone business could be a “distraction” from the company’s larger goal of im