Dell joins smartphone rush

19 August 2009

NEW YORK: Dell is joining the worldwide rush to produce smartphones, partnering with China Mobile to produce a model running Google's Android system.

The Round Rock Texas-based computer giant, currently the world's second-largest PC producer, already has alliances with mobile firms Vodafone and TeliaSonera in Europe to sell notebook computers and the smartphone move is part of a growing trend to offer a full suite of gadgets.

Dell founder Michael Dell previously said that his company wouldn't enter the mobile market as margins were low and established producers such as Nokia too dominant.

But computer rival Apple has turned that notion on its head with the success of its highly profitable iPhone.

"If you don't have an offering in a particular area you invite a flanking movement by your rivals," according to industry analyst Roger Kay.

The move comes as research by consultancy Gartner predicts that smartphones will increase their share of the European mobile market from their current 28% to 70% by 2012.

Sales of smartphones, such as iPhone and Blackberry, are up 27%  this year even as the overall mobile market has seen its third quarter of declining sales.

Carolina Milanesi, Gartner's research director, says, "companies that were slow to the smartphone area, such as Nokia and Sony Ericcson, are trying to pull everything out of the bag to stop high-end customers going elsewhere.

"The only phones that are selling now are smartphones and the ultra low-end sector. The mid-market has virtually dried up."

Data sourced from Financial Times, Daily Telegraph; additional content by WARC staff