Dell confirmed Friday that it plans to enter the smartphone market with wireless carriers in China and Brazil for its new Mini 3 device. Dell has inked deals with China Mobile, the world's largest telecommunications company with more than 500 million customers, and Claro, which serves more than 42 million consumers in Brazil.
Dell said its entrance into the smartphone market reflects its ongoing expansion into mobile Internet products and services through value-added relationships with operators. The company pointed to its move to embed China Mobile's 3G technology and services into its netbooks earlier this year, giving Dell a stronghold in the Asian netbook market.
"Our entry into the smartphone category is a logical extension of Dell's consumer product evolution over the past two years," said Ron Garriques, president of the Dell Global Consumer Group. "We are developing smaller and smarter mobile products that enable our customers to take their Internet experience out of the home and do the things they want to do whenever and wherever they want."
Dell's Grand Opportunity
Dell's opportunity in China is grand. According to Research and Markets, smartphone shipments in China grew 30 percent to 23.6 million in 2008 despite China's uncertain economy and overall stagnation in handset shipment growth. Mobile Internet applications, GPS and multimedia functions have been the most important drivers of this growth.
Meanwhile, In-Stat estimates that the compound annual growth rate of China's smartphone market will be 25 percent through 2013 and the next wave of smartphone market growth will be driven by lowered entry barriers for both the OS and the chipset platform.
America Movil, which operates Claro, expects the Brazilian wireless industry to grow faster than other Latin American countries through 2010. America Movil has 25 percent of the market in Brazil and saw 19 percent customer  growth in the third quarter, gaining 1.8 million subscribers.
Dell's Broader Impact
Dell has released photos of the Mini 3, but few details. What is known is that Mini 3 smartphones will run on Google's Android platform. The Mini 3 is a touchscreen device. Dell will customize the device for customers and carriers around the world.
The world won't have to wait too much longer to get a clearer picture of what the Mini 3 can do. Details of the phone models will be announced when the devices become available in stores, anticipated in late November for China Mobile and by year's end for Claro.
Avi Greengart, an analyst at Current Analysis, said getting into the smartphone market is a big step for Dell. With plenty of growth ahead, Dell could make an impact with a combination of hardware and software. But the company will compete head-to-head with Nokia in China.
"In some ways you could say they are dipping their toe in the market. Of course, China is an enormous market to dip your toe into," Greengart said. "For Dell to compete in the developed world, they are going to need carrier distributions and unique differentiation. It doesn't look like Dell has added anything on the software side, and that's something that's going to have to change if they want to make a broader impact."
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