Michael Dell Says He Has No Intention Of Getting Back Into Smartphones


Michael Dell, fresh off securing shareholder approval for his $25 billion buyout plan, told CNBC Friday he has no intention of getting back into the smartphone market.

Dell will resell other vendors' smartphones but plans to stay focused on enterprises when it comes to making its own products. Dell is also stepping up investment in cloud computing and "will participate in tablets and all sorts of client devices" as part of that effort, Michael Dell told CNBC.

"Our main business is helping our customers secure, protect their data and access it from any device they want to," Dell said in the CNBC interview.

[Related: Dell Lays Out 4-Point Plan For Post-Buyout Road Map]

It's not surprising to hear that Dell wants to stay away from smartphones, since its first foray in that business did not turn out well.

Dell launched a consumer mobile devices unit in 2007 and hired Motorola executive Ron Garriques to run it. But, Dell disbanded the unit in November 2010 after deciding the consumer market wasn't viable.

Plus, one of the big reasons Dell is going private is so it won't have to deal with the razor-thin margins of consumer products and can instead target deep-pocketed enterprises.

Dell's first smartphone, the Android-powered Aero, debuted in 2010 and was priced at $99. But, it suffered from both lackluster design and Dell's exclusive partnership with AT&T, which at the time had just killed off its unlimited data plans.

The same year, Dell released a pair of higher-end smartphones with Gorilla Glass displays, the Venue, which ran Android, and Venue Pro, which ran Windows Phone 7. The devices -- code-named "Thunder" and "Lightning" and available on AT&T and T-Mobile -- failed to pry people's attention away from their iPhones.

Dell stopped selling Venue smartphones in the U.S. last March, but they're still available in other countries.

The Venue Pro was touted as the top-of-the-line Windows Phone 7 smartphone, but repeated delays and customer service issues combined to stall its progress.

Dell also released a pair of devices, the Streak and Streak 7, which sought to blur the lines between a smartphone and a tablet.

With 5- and 7-inch screens, the Android-powered Streaks were Dell's bid to get a piece of the tablet action, but Dell pulled them from store shelves in December 2011, presumably due to weak sales.

While Dell is giving smartphones a miss, rival Hewlett-Packard sees them as must-have devices. Last September, Whitman surprised investors by saying HP would eventually return to smartphones even though its $1.2 billion acquisition of Palm didn't work out.

"My view is, we have to ultimately offer a smartphone because in many countries of the world, that is your first computing device," Whitman said in a television interview with Fox Business Network at the time.

Patrick Moorhead, principal analyst for Moor Insights and Strategy, believes Dell might revisit a return to smartphones if it's able to build a successful tablet business.

"In the future, it will be hard to say you are a client computing player without being in smartphones," Moorhead said in an email. "I would expect that if Dell can start to drive tablet sales, they would more strongly consider smartphones."

PUBLISHED SEPT. 13, 2013