Can Dell Dethrone the iPhone?

When the subject of a rumored Dell cell phone came up at the company’s financial analyst meeting this week, Dell indicated there was one coming, but gave few details on it. So far, all we know for sure is that it will be based on LTE, or 4G network technologies, putting the timing for the device in 2011 for appreciable volume (though it is at least possible we could see it in late 2010). I figured it might be fun to chat about what Dell needed it to be, if it was going to beat the iPhone. Given that Dell’s Digital Jukebox got its butt kicked by the iPod, I’m thinking the company is looking for a rematch, and could do it right this time.

But what would “do it right” mean, and how do you beat the iPhone?

Palm and Blackberry Show the Way

Both the Palm Pre and Blackberry line of phones have grown market share during times when the iPhone has been doing well, by focusing either on things the iPhone did poorly, or a large customer base that the iPhone doesn’t target very well.

The Palm Pre is very similar to the iPhone, improving on the iPhone’s user interface, adding a keyboard, and a removable battery to stand out favorably against the competition. RIM continued its focus on with Blackberry phones, and I know a lot of people who use a Blackberry for work, and an iPhone as their personal phone as a result.

This suggests that the ideal product might be one that businesses would embrace, while still being attractive for non-business use: a combination between the Palm Pre and Blackberry experience.

Owning the Customer

One other thing that the iPhone, Blackberry, and Palm Pre have in common is that all their vendors tend to own and assure the customer experience. They also demand generation (marketing) for their respective phones, and Palm is actually doing a rather impressive job promoting their phone at the moment. I think they would be doing vastly better if they sold through multiple carriers, like Blackberry does, as opposed to just through Sprint. Sprint, unfortunately, is still the least-liked vendor in the U.S., and that has to hurt the Pre’s potential until Palm moves to additional carriers next year.

One of the reasons I think that Android and Microsoft phones don’t seem to be doing as well at the moment is that with those phones’ customer ownership isn’t clear. You have one company doing the hardware, another providing the network services, and then a third providing the software user experience. None of these players generally seem willing to market at Apple, Blackberry, or Palm levels, nor actually assure that the total experience is market leading.

Dell certainly can own the customer. They typically do a better job of this in the PC market than any other vendor, because most of their products, unlike competitors’, are sold directly from the company. But cell phone service providers tend to complicate things, and it isn’t clear if Dell can, or even wants to, step up and play this game like Apple, Palm, and RIM do.

Leveraging PCs

Palm traditionally does the best job working with PCs. For instance, more of its products can typically be tethered to a PC and work like a modem than competitors. Blackberry was slow to the 3G game due to battery life concerns, making tethering a lower priority for it, and AT&T has prevented Apple from offering tethering. Even though this is changing soon, it takes us right back to owning the customer, and points out that even Apple doesn’t own its customers exclusively.

But for Dell to have an advantage, it has to come at this market from its core strength, which is PC sales. If Dell’s device makes a compelling PC accessory and connects solidly back to the Dell line of laptop products, the synergy could give it an advantage over others. However, Apple did already take a big step in this direction with MobileMe.

My Dream Phone

While I doubt this is the way they will go, were it me, I’d do an Alienware phone. Base it on Nvidia’s Tegra platform, give it an organic Alien-style gloss and metal finish, and blow the windows out in performance. Regardless of the OS, (likely Android or Windows Mobile 7) I’d make sure it had a unique Alienware feel to it and wrap it with a set of accessories that were as wild as the phone was. They could do this, and that’s one phone I’d lust after. Maybe it would look a little like this, but with more of an alien edge.

Wrapping Up

The old Dell DJ got its butt whipped by the Apple iPod, largely because Dell was unwilling to do what it took to beat the competition. That included better industrial design, owning the user experience, and powerful marketing. Its second run at Apple is coming. If Dell learned from its first failure, we should see a very interesting product, but likely not much before 2011 when LTE, or 4G, becomes more prevalent. Until then, we will have to imagine what a Dell phone might look like, and whether it will repeat the failure of the DJ, or learn from Palm and Blackberry to pull an upset. We’ll see.

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