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Dell Chief Confirms Android Handset

Dell (NASDAQ: DELL) CEO Michael Dell today confirmed that his company will begin selling an Android smartphone in the U.S. next year, but industry watchers say the computer maker must also deliver a consumer experience backed by apps to be successful.

Dell said his namesake firm will issue an Android handset in the U.S. by early 2010, although he did not provide any further details. The news came during a question-and-answer period with a mocoNews reporter at the Firemobile conference in Seattle. A Dell spokesman declined to comment on the report.

Dell's Android play isn't entirely surprising, given it already sells an Android handset in China and there has been speculation for some time that it would parlay that experience into a stateside venture.

Recent reports say the Dell Android phone would arrive on AT&T (NYSE: T), which would be the carrier's first handset based on Google's (NASDAQ: GOOG) open source mobile platform.

The news of "Delldroid" comes at a time when smartphone sales continue to climb. In the second quarter, 40 million smartphone sales worldwide -- a 27 percent gain from the same period last year -- showed that high-end handsets are sustaining the ability to outperform regular phones in the mobile market, according to research firm Gartner.

Naturally, Dell, like Acer and other tech firms, would like to get a slice of that action, said Jim McGregor, chief technology strategy analyst at In-Stat, but it may not be the company's best use of resources.

"Everyone goes after the smartphone market because it's the billion-unit pot of gold, the fastest-growing segment in handsets. And, for a lot of these companies, there's nowhere else to expand. Intel is facing this dilemma: After you're dominating servers, PCs, where do you go next? So everyone wants to go mobile," McGregor told InternetNews.com.

"But Dell's core competency is computers, and they're losing market share, do they have the resources to invest to make this successful? I've got to question that, as well as if it's in their best interest as opposed to focusing resources on what they do."

McGregor also cites the complexity of the mobile ecosystem as a challenge for Dell's smartphone venture. "For Dell to do well in smartphones, they have to deliver more than a useful device, they have to offer a content, an experience people have come to expect," he said. "And they're not going to pull it off by themselves."

Apple (NASDAQ: AAPL), he said, was able to spark a cultural and consumer phenomenon with its entry to the space because the approach was not device-specific. "Few tech companies do well when they expand out of their core. Apple did well because they don't focus on the device, they focus on the experience."

The confirmation of Dell's handset comes on the heels of Acer's plan to sell an Android smartphone this year. The computer manufacturer formally unwrapped some details of the Acer Liquid but declined to disclose any pricing, release and carrier information.

McGregor is more optimistic about the Taiwan-based firm's chances for smartphone success than he is about Dell.

"A couple of years ago, I went to see all these tech companies, and I told them, if you just focus on computers, in five years you'll be dead. Most of them freaked out, but Acer, they said, 'You're right.' And they showed me demos of a whole bunch of consumer electronics they were working on," he said. "They're already on the way to being a mobile consumer electronics powerhouse."

Allen Nogee, principal analyst for wireless technology at In-Stat, said the Acer Liquid, will likely come to the U.S. on AT&T as well.

"This is a tri-band (850, 1900, 2100MHz) HSPA phone, so that rules out Verizon, Sprint, and T-Mobile. It would work on AT&T's network, but to date AT&T hasn't been a strong proponent of Android. It's rumored that AT&T will get the Dell Android phone next year, and this phone is similar to that one, so I wouldn't say its out of the question. In any case, I think it will be available in the U.S., if not from AT&T directly," Nogee told InternetNews.com.

Nogee said it may be hard for Acer to gain traction in the U.S. market, as its brand is unfamiliar with consumers outside of the low-cost PC space.

In the PC area, Acer has a name in low-cost PCs, but all smartphones are priced at roughly the same range of prices, and users tend to favor the bigger names over the lesser brands in this case, he said.

"It's not about the phone as much as it is about the applications you can run on it. You see the latest Apple ads talking about the 85,000 applications for the iPhone. This is genius, because it says any app you ever need in the future is here, even if you don't know what you need today. Android and Google are also starting to take advantage of this in their latest ads, but there's a long way to go."