Dell`s problem appears to be Intrinsyc`s problem.
Dell Mobile Phone Is Doomed, Analyst Says by Eric Savitz April 13, 2009,
Unable to get the attention of the wireless carriers, Dell (DELL) has decided to enter the mobile phone market by selling its wares direct through retailers, according to Collins Stewart analyst Ashok Kumar. The analyst writes that the carriers have decided to pass on Dell’s handset, “citing a non-compelling product with a roadmap that lags competition.”
Kumar is not optimistic about Dell’s chances for success with that approach, asserting that the company is “facing a stacked deck with little experience on how to play this game.”
Kumar wonders whether consumers will want a phone that the carriers consider to be not good enough to sell directly. “Consumers are used to subsidized handsets and are not used to paying full price,” he notes, and assumes that retailers will provide prime shelf space for Dell’s phones.
“Dell Committed itself to the handset business with a poorly planned feature set and cost targets,” he writes. Research In Motion (RIMM), Apple (AAPL) and Nokia (NOK) “each has a stronger roadmap and a customer footprint that Dell is likely to displace with its current offering.” He says the company could still decide to “cut its losses and shoot the product before mass production.” But if they go forward, a move that will provide “larger marketing funds,” then Kumar contends “the company is unlikely to get sufficient traction for returns on its investment and to develop a next generation product. Thus, such a course would doom its handset and the ecosystem around it to a slow death.”
Dell today fell 31 cents, or 2.9%, to $10.45. |
