
Dell has learned the hard way that wireless carriers still wield a ton of control in the wireless industry. It appears that unless you are Apple (NSDQ: AAPL), Google (NSDQ: GOOG), or even Palm (NSDQ: PALM), its not that easy to win the carriers over. After rumors spread earlier this year that Dell and other computer makers were entering the smartphone market, it now appears that the companys first attempts will never see the day of light.
Shaw Wu, an analyst at Kaufman Bros., asserts in a research note today that the companys first attempt was basically rejected by the carriers. The reason? It was too Dell-like, reports Tech Trader Daily. Despite two prototypesusing both Windows Mobile and Googles AndroidWu writes that the carriers werent impressed. From our conversation with supply chain and industry sources, it appears that it ultimately came down to lack of carrier interest and small subsidies, making it difficult for Dell to make a profit. Apparently, they lacked differentiation.
But Dell isnt giving up. Wu wrote that Dell is going back to the drawing board is designing a cell phone with more differentiation, that will likely involve vertical integration of some sort including software and/or services. To do so, Dell may make an acquisition. Dell isnt the only computer-maker eying the mobile market. Acer, Asustek and Lenovo are also experimenting. Perhaps, its not too late for Motorola (NYSE: MOT), Palm and others can still bank on a buy-out.
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Dell’’s first cellphone prototypes said to "lack differentiation"