Dell (NASDAQ:DELL has decided to replace the 10,000 or so Research In Motion (NASDAQ: RIMM) BlackBerries that its employees use with its own Venue Pro smartphone. The Dell product is largely untested. It will launch the smartphone with cellular provider also-ran T-Mobile in time for the holiday season. The fact that AT&T (NYSE: T) and Verizon Wireless will not offer the handset is telling.
The Venue Pro will use the Microsoft (NASDAQ: MSFT) Windows Phone 7 operating system which is also new to the industry. Microsoft has a share of the US market that is in the single digits. The high-end of the smartphone business is dominated by Apple (NASDAQ: AAPL), the Blackberry, and phones the run the Google (NASDAQ: GOOG) Android OS or Symbian.
“Clearly in this decision we are competing with RIM, because we’re kicking them out,” the computer maker’s Chief Financial Officer Brian Gladden, said in an interview with The Wall Street Journal. Dell has lost its reputation for product development and smart management over the last three years, which is about the same time that founder Michael Dell returned as CEO. The company has decided to compete in the crowded smartphone market, but it has few advantages. The number of applications which run on Windows 7 handsets it tiny compared to the iPhone or smartphones powered by Android.
Several companies including Microsoft and Google launched their own handsets only to withdraw them from the market due to customer service issues or lack of consumer interest. Other companies such as Facebook, which would have a natural customer base, are taking a pass on the smartphone market for these reasons.
The Venue Pro may not sell well. It could be the Palm Pre of 2011. Dell will have lost face, and its 10,000 employees may end up with a smartphone that no one else wants.
Douglas A. McIntyre
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