Dell Deals In BlackBerry
By Brad Smith
Even though its innards run off an Intel 386 chip and it has a keyboard, the Research in Motion Inter@ctive pager isn't exactly
a computer. So why is Dell Computer Corp., the globe's largest direct seller of computers, interested in selling pagers?
Simply put, it's another example of the computing industry's recognition that wireless is going to play a bigger role in its future. It
also may indicate the start of something new for Dell, which sold $23.6 billion worth of computers in the past 12 months.
"As the No. 1 U.S. supplier of PCs, Dell is committed to bringing the best wireless technology to its customers and is taking an
active role in developing this and other key technologies," says Carl Everett, Dell's senior vice president for personal systems.
Effective tomorrow, Dell plans to sell RIM's BlackBerry device and service, which uses the BellSouth Wireless Data LLC
network to provide mobile access to unlimited e-mail, primarily to corporate intranets. Dell initially will target its existing
corporate customers.
More than 450 companies in North America already are using BlackBerry, which uses the Inter@ctive 950 pager. RIM also
makes the 850 model, which is being used by American Mobile Satellite Corp. for its new eLink service. Besides receiving
e-mail, the devices also have built-in personal information manager applications, like a calendar and an address book.
The Inter@ctive 950 pager accounted for 80 percent of RIM's $48 million total revenue during the 1999 fiscal year ending
Feb. 28. At $399 per device, that amounts to more than 100,000 units sold.
In recent weeks, RIM also has cut deals to provide more than 1,500 BlackBerry units to Merrill Lynch Technology Group and
500 units to the U.S. law firm Gibson, Dunn & Crutcher.
Word about the Dell/RIM deal leaked out at the Comdex computer show in Las Vegas a week before it was announced,
causing a dramatic run-up in RIM's stock price. In the space of a week it climbed from $42 a share to $53.
"The deal's good for RIM and the movement in their stock price is evidence of that," says Bob Egan, an analyst with The
GartnerGroup. "But it's also good for Dell because it fills a hole in their portfolio. It also shows that over the long term Dell
intends to do partnership deals outside its own core skill sets for wireless connectivity. It knows where the future is going to
be."
Mark Guibert, marketing director for Canadian-based RIM, says the 400-employee company is ready for the increased
demand expected from Dell's sales. He shies from forecasting sales generated by the deal, but admits "it is safe to be optimistic
about the partnership. There are plenty of synergies between the value of the BlackBerry and their existing business efforts,
especially with their distribution and customer relationships."
Guibert says RIM's manufacturing facility in the Toronto suburb of Waterloo has excess capacity that can be tapped in the
short term and the company has a "suite" of contingency plans in the long term.
|
