Dell mobile phone - signals new strategy

This week has seen a couple of announcements that reinforce ( as if we needed any further proof ) that mobile is now the focus of attention for the coming years.

Apple’s previous launch of a tangible product in this space with the iPhone into this market has now been followed up by two additional players – O2 ( UK network carrier owened by Telefonica ) and Dell.

Marketing week reports that O2’s intention is to increase its focus in the area of own branded products already having two variants on the market, following their lead Vodafone has also entered into own branded handsets.

More suprising is Dells entrance into this market of huge potential, it is however somewhat worrying.

With failed attempts behind it in the consumer electronic area, it is now entering an already competitive market place.

Dell has three problems

Brand

Firstly in terms of brand elasticity Dell has not ported well from it’s traditional PC’s roots – it failed in the television and MP3 space.

Production

Secondly it will also find itself to be limited in it’s production partners. With the prime producers already signed to key players in the industry and Dell’s position as neither a force in the consumer electronics area or the mobile space it will struggle with delivery of a product worth talking about – with it’s present fiscal position how much money will Micheal Dell by willing to put on the line ?

Subsidies

The fact O2 and Vodafone have now started to expand into branded products this will surely affect the subsidies they are willing to apply to now competition technologies and handsets – this combined with the actual rising costs of producing handsets with extended features for media consumption makes this move by the Dell a high stakes bet.


All the above companies though recognize the growing importance and dominance the mobile will have in the future , moving away from a communications device to encompass many more functions and features all of which offer monetization opportunities – how can they resist.

Is this right for Dell? Are they taking their eye off the ball - should they re-focus on their core market ?