Dell Phone Prototypes Seen As Dull By Carriers

It's no secret that Dell has been spending a few of its research and development dollars in the mobile department, but until now, we've yet to actually hear from Texas how close it was to releasing a tangible product. Accordig to a new report from Barron's, it's close enough to have shown at least two products to a number of US carriers. Unfortunately for Dell, it seems the results were less than spectacular.

In fact, we're hearing that Shaw Wu, an analyst at Kaufman Bros., has stated that Dell was met with little to no acceptance when showing off its Windows Mobile and Android-based devices. The word he used to describe the reactions were that its handsets were simply too "Dell-like." Ouch. It's stated that the prototypes shown were just too similar to other offerings already on the market, and thus, weren't particularly enticing for carriers already set up with a flagship device. In Wu's words: "From our conversation with supply chain and industry sources, it appears that it ultimately came down to lack of carrier interest and small subsidies, making it difficult for Dell to make a profit. In our view, the last thing Dell needs is to enter another money losing business as it seeks to preserve its operating margins of 5%-6%."

The most painful bit that seemed to be handed out from everyone that saw the phones were that they "lacked differentiation," and given that so many carriers already have a wide array of cellphones from Apple, HTC, Samsung, LG, Nokia, Motorola, Palm, etc., Dell is going to have to really produce something awe-inspiring to convince suits that are set in their ways to pony up for subsidies and marketing. Even though the reaction has been lukewarm at best, Dell isn't giving up on its dream to one day compete in the cellphone market. Wu proclaimed that "Dell remains committed to the cell phone space as it appreciates the opportunity in smart phones and the longer-term cannibalization potential of PCs."

The good news here is that Dell is taking the advice seriously and taking things all the way back to the drawing board -- purportedly, at least. In all this proves true, you can probably bank on seeing some pretty savvy phones from Dell emerging over the next year or two. Unfortunately, all this rework likely means that we won't see anything from the company in the near future, but we'd always prefer something to take longer and be right than to be rushed to market before its prime.