Dell’s Comeback: New Smartphone May Be in the Works

Michael DellWhen Michael Dell resumed his role as CEO, on February 2007, of the company he founded nearly 25 years ago – he faced quite a challenging business environment. Since his departure from the top spot in 2004 ; where he stepped aside as Chief Executive Officer while retaining his position as Chairman of the Board – the Round Rock, Texas based co. which develops, manufactures, sells, and supports personal computers and other computer-related products – had seen its fortunes turn from bad to worse. As we recall – Dell was a major force in the PC industry from 1997 through 2004 and consistently gained market share from its competitors.

However, since 2004 when Kevin Rollins took over the CEO reins – Dell Inc. (DELL) lost its lead in PC market share to Hewlett-Packard, its revenues kept downtrending and its stock price fell more than 30%. Dell’s customer service ratings also fell and server growth literally stopped as the company failed to embrace AMD’s Opteron soon enough.

Nevertheless, things have significantly changed with Mr. Dell’s return. The company saw immediate structural and operational changes, including new plans and new initiatives aimed at improving the company’s financial performance, which is now bearing its fruits with the co. moving toward becoming once again a market-leading company.

According to a recent interview with GigaOM‘s Om Malik, Michael Dell besides – as Malik notes, remaining quite a humble guy – had very interesting things to say on the computing industry as a whole.

He mentioned the fact that in the last eight years, in the U.S., Dell had sold more computers than any company in the world, with the co’s lead widening relative to the nr. 2 company in the 2Q’08.

He stressed the connection his co. has with its customers and the information they convey to them in the process.

By knowing exactly what customers want – stated Mr. Dell – and being able to build that and provide products and services tailored to their needs and being able to personalize products — that creates significant advantage and significant growth possibilities for us.

Mr Dell continued by saying that “Dell Inc. had identified five big opportunities, about $5-$10 billion each in terms of scale opportunities. They are the consumer business, mobile computers, emerging countries, enterprise, and small/medium business”.

We have, said Michael Dell – reorganized the company around these key priorities.

The most interesting part of the interview however, I thought – was Mr Dell’s remark on the handset category. His reply to Malik’s question on the emergence of Google’s Android or Symbian, and if there was an inclination for Dell to get involved into the phone business? — Mr Dell responded, that while he was not ready to publicly disclose any plans – he did reveal they “were kind of working on that” but of course – not ready to “publicly disclose” anything yet. In any event, the development of smartphones for Dell seems like the next logical step at this point. Additionally, the market is simply too big for Dell to ignore it.

I believe Dell Inc. is stepping back again into his former role and offering again reassurances to its consumers and its shareholders.

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About Ron Haruni 1068 Articles
Ron Haruni is the Co-Founder & Editor in Chief of Wall Street Pit.

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