Dell Plans XPS 12 2-In-1 As Market Enters 'Perfect Storm'

Dell is reportedly readying the launch of a 2-in-1 called XPS 12 that is similar to Microsoft's Surface line -- which Dell recently agreed to resell.

Dell and HP drew the ire of the channel last week when they announced that they'd bypass the channel and resell Surface Pro tablets directly to customers. Now, partners and analysts say a new product from Dell could usher in a period of intense price competition as vendors grab for share in a relatively new, promising market segment.

In the second quarter, the worldwide tablet market declined 7 percent year over year, and the segment's dominant vendors -- Apple and Samsung -- lost market share as new players entered the market, according to data from market research firm IDC. IDC is predicting an 11 percent decline in the tablet market next year, but 80 percent growth in the 2-in-1 category.

[Related: Microsoft Claims Partners Will Be Able To Compete With Dell On Surface Pro Pricing]

The 12-inch XPS 12 would join a 2-in-1 tablet market that seems to welcome new players by the day. In addition to Microsoft's Surface 3, Surface Pro 3 and soon-to-be-available Surface Pro 4, the XPS would compete with Lenovo's recently announced Miix 700, HP's Elitebook line and Apple's 12.9-inch iPad Pro, which is slated for release in November.

"I would expect to see prices to become very competitive in this space," Stephen Monteros, vice president of business development and strategy at Ontario, Calif.-based Dell partner Sigmanet, told CRN. "We're getting requests for Surface-type devices, but Chromebooks come in around $400," said Monteros, who does a lot of business in the education and retail markets.

"Microsoft has to be close to that range if they're going to get any traction in that space, and for Dell, it's a question of coming up with a compelling offer, something in the $400 range. And because it's a newer device, and Microsoft has set a standard, it's going to have to come with added features. It's a price-point play."

IDC tablet analyst JP Bouchard told CRN that while 2-in-1s make up only a small portion of the market now, they're entering a "perfect storm" of pent-up demand. Thanks to the market visibility and credibility of the iPad Pro, PC vendors in the next year or so will beef up their product lines to offer 2-in-1s that cover all price points from $300 to $1,200, he said.

"Tablets were not a device designed to replace another device; it's an additional device," Bouchard said. "Right now, with Windows 10 launching, enterprises are looking at migration, and it's a great platform for that form factor. Two-in-ones are not an additional device; it's a replacement device. Businesses looking to replace portable PCs can go to a 2-in-1 in the $800 to $1,200 range."

Monteros said he expects Sigmanet to pick up the XPS 12 when it becomes available to partners.

And he said he doesn't expect customers or partners to get confused by the fact that Dell may offer competing tablets directly and through the channel.

"As a VAR, most of us are verticalized," Monteros said. "We know what the applications are, we know what works. Whatever's best for the customer, that's what you go with. The rest is just noise."

Reports indicate that the XPS 12 tablet will have a 4K display, and a very Surface-like kickstand and detachable keyboard. Images and the details now available about the XPS 12 were first published by German website Giga.de.

The XPS 12 is scheduled to be introduced in October, according to reports. Also during that month, Microsoft is expected to introduce the Surface Pro 4, and Dell will hold its annual Dell World conference.

A Dell spokesman told CRN on Monday that the Round Rock, Texas, company would not comment on the XPS 12 because it's an "unannounced product."

Neither pricing for the XPS 12, nor which processor will be powering it, has been reported. The device will reportedly include a 3,840X2,160 4K display, about 10 hours of battery life, an 8-megapixel camera on the rear of the tablet, a 5-megapixel camera on the front and a Thunderbolt 3 connector rather than a USB 3.0 port.

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PUBLISHED SEPT. 14, 2015