Dell Smartphone Plans More Than Just Rumors

Michael Dell and Smartphones
From left: Michael Dell, chairman and CEO of Dell; Gary Shapiro, president and CEO of the Consumer Electronics Association; and Donna Morea, Northern Virginia Technology Council (NVTC) board chair and president of CGI. Source: NVTC

McLEAN, Va. — Some rumors are just too sticky to let go.

Michael Dell gave here today what may be the clearest indication yet that the computer company he founded 25 years ago is looking to stake a claim in the burgeoning smartphone market.

The comments came during a far-ranging interview by Gary Shapiro, president and CEO of the Consumer Electronics Association, here at a packed luncheon hosted by the Northern Virginia Technology Council.

Pointing to Nokia CEO Olli-Pekka Kallasvuo’s proclamation at January’s Consumer Electronics Show that smartphones would supplant the PC as the primary computing platform, Shapiro asked Dell if there were any truth to the “rumors out there about a telephone in Dell’s future.” The PC giant’s CEO paused a moment before answering.

“Well, if [Kallasvuo] says that the telephone is the future of computing, then, you know, we’re in the computer business, so I guess we must be in the phone business,” Dell said with a smile, drawing a hearty laugh from the crowd of about 700.

Dell, which has been struggling to reclaim its share of the PC market and recently undertook a massive internal reorganization, has already started shrinking its computing devices with the long-anticipated netbook it unveiled in September. But the company, like many PC makers, is struggling for a way to cope with flattening computer sales — even as the smartphone arena continues seeing double-digit growth.

If the rumors are to be believed, the release of a Dell smartphone could come later this month at the 3GSM conference in Barcelona.

Dell’s cagey answer on whether that would indeed be the case didn’t satisfy Shapiro. He tried again, and Dell got serious. Talking of the convergence of the PC and smartphone markets, Dell said he expects the coming years to produce an emerging class of devices that fill in the screen-size gaps between notebooks and devices like Apple’s iPhone, and his company will be right in the thick of it.

“I do think of it as more of a continuum where you’ll see many different screen sizes,” he said. “Over time I think you’ll see the size range of computing devices that we play in grow — to [include] smaller ones as well.”

Dell, chairman and CEO of the eponymous company, also cited partnerships with major wireless carriers like AT&T and Vodafone as further evidence that the computer giant is focusing heavily on mobile computing.

Economic storm clouds

While Dell wouldn’t tip his hand about his company’s specific plans, he seized today’s opportunity to pontificate on a range of other topics, chief among them the collapsing economy and the role IT can play in turning it around.

[cob:Special_Report]Just back from the global economic summit in Davos, Switzerland, Dell said the mood there was dark.

With many countries engaged in a similar debate as the one playing out on Capitol Hill — that is, what can the government do to rehabilitate an imperiled economy — Dell said that the approaches he heard at Davos vary widely.

Page 2: Dell’s take on the IT stimulus package

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Like many tech executives, he supports the IT provisions in the U.S. stimulus bill that is currently working its way through the Senate. Still, he questions the wisdom of the overall approach, particularly the bailout mentality that led to the funneling of hundreds of billions of dollars to failing banks.

According to Dell, some leaders in Davos said that to stimulate the economies in their own countries, they are trying to create favorable business conditions that will entice foreign companies to set up shop inside their borders — rather than spending lavishly in the name of stimulus.

Dell, again echoing a popular refrain among tech leaders, said he sees IT as a central part of the solution to both the United States’ economic woes and the long-term question of how the nation can better compete.

“The one word that is missing from [the stimulus package] is ‘competitiveness.’ And to me, that’s a really big issue,” he said. “If we’re not competitive, then we’ve only put a Band-Aid on the problem.”

The current stimulus bill would send billions of dollars to health IT initiatives, upgrade the country’s electrical grid and bring broadband to rural and underserved areas.

Despite his reservations with the bill, Dell said its IT provisions could be an important step toward helping the country tackle big problems.

“I still get very excited about what the potential is for the industry to change the world,” he added. “I think when you look at all the scientific and technical challenges that exist, whether it’s in medicine or any other field, they’re essentially computational problems. And at some point, we get enough computational power where we can solve those problems.”

In healthcare, where Dell and numerous other firms are developing sophisticated technologies to digitize records and integrate systems, the need for an IT solution may be clearest.

“When I go to the doctor’s office, I see a lot of files. It’s a very last-century type of experience,” he said. “You’ll find more technology at the grocery store than at some doctors’ offices.”

Dell added, “When I look at industries across the United States, I would say healthcare is probably the least penetrated of industries, and has the greatest opportunity to further use IT to lower costs, to improve accuracy, to improve patient outcomes, to improve diagnoses. I think it’s a fantastic opportunity and we’re investing a lot in it.”

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