Dell is understood to be plotting a move into mobile phones after poaching Motorola executive Ron Garriques to run its new global consumer group. The news comes just weeks after rival Apple announced details of its long-awaited iPhone.
Garriques resigned as president of Motorola’s $28bn (£14.4bn) mobile devices division earlier this month and industry sources claim he will spearhead the launch of Dell-branded mobiles.
It is thought that Dell will outsource the production of the phones and rebadge them with its own brand name – as it already does with the majority of its PCs. Dell already produces PDAs (personal digital assistants) but the mobile handset market is fiercely competitive and it is dominated by a handful of players led by Nokia and Motorola.
Electronics giants such as Panasonic and NEC have tried to break into mobile phones but have been forced to quit Western Europe because of the intense competition. But companies such as Hewlett Packard and Toshiba have had more success with smartphones, which combine many of the functions of a mobile phone with e-mail and a personal digital organiser.
Neil Mawston, director at telecoms consultancy Strategy Analytics, says the most sensible strategy for Dell would be to focus on smartphones rather than the consumer market as a whole. But he adds: “Dell would have a reasonable chance in smartphones because the market is smaller and experience isn’t so important. But the fact that it is smaller might make it less attractive.”
The appointment of Garriques to head the new global consumer group is the latest in a series of changes outlined by Michael Dell, the technology company’s founder, since he returned as chief executive in January.
Observers claim it is further evidence of a shift in priorities towards the consumer market by Dell, which has traditionally relied on sales of computers to businesses.
Dell declined to comment on suggestions it is to move into the mobile phone market.