Another Iconic Tech Player Throws In the Mobile Towel
Tech companies nowadays need a mobile strategy to stay relevant, especially if we're talking about a gadget maker.
Unfortunately for one of the few remaining domestic PC makers, it's been grasping for a mobile tactic for years and keeps coming up short. Dell (NAS: DELL) has just officially killed its Venue and Venue Pro smartphones in the U.S., with no new smartphone offerings to take their empty seats. The pair of devices ran Google Android and Microsoft (NAS: MSFT) Windows Phone, respectively.
A Dell spokesman told PCWorld that "mobility products have shorter lifecycles than laptops and desktops," which is simply a way of saving face and admitting that no one was buying these things. The spokesman did say that Dell will be introducing more mobile devices later in the year without elaborating on what types of gadgets to expect. This will probably take the form of a Windows 8 tablet, but we'll have to wait and see on that one.
Dell is still selling these models outside the U.S. in Asian markets, but as of right now it has no domestic smartphone or tablet offerings after it similarly killed its Streak tablets stateside a few months ago. The iconic PC company has now pulled out of the biggest growth market in its home turf.
In fairness, its closest rival, Hewlett-Packard (NYS: HPQ) , suffers a similar fate. HP also axed all of its mobile offerings that were based on mobile money pit webOS and likewise lacks any current smartphones or tablets. You can also expect some Windows 8 tablets from HP later this year, probably in time for the holidays.
Dell is already stuck with low margins, since the bulk of its sluggish business is in commoditized hardware. Last year, Dell saw revenue grow by 0.9% and realized just a 5.6% net margin. Meanwhile, Apple (NAS: AAPL) is seeing explosive growth in iPhones and Macs while enjoying juicy margins. Consumers simply can't get enough of its iDevices, perhaps a lesson in the merits of consistent innovation for the rest of the field.
I suppose it might not be entirely fair to say that Dell doesn't have a mobile strategy. It has one that just happens to be horrendous. So I'm going to go ahead and give Dell an underperform CAPScall today, because at this rate, the company is going to sit on the sidelines for the biggest computing revolution in generations.
When I say biggest in generations, I'm talking about being measured in 13 digits. The mobile revolution will be The Next Trillion-Dollar Revolution, and while Dell is missing out, there's another company that isn't. Get this special free report to find out who's powering the revolution from the inside.
At the time this article was published Fool contributorEvan Niuowns shares of Apple, but he holds no other position in any company mentioned. Check out hisholdings and a short bio. The Motley Fool owns shares of Apple, Microsoft, and Google.Motley Fool newsletter serviceshave recommended buying shares of Google, Microsoft, and Apple, creating bull call spread positions in Apple and Microsoft, and writing covered calls on Dell. The Motley Fool has adisclosure policy. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. Try any of our Foolish newsletter servicesfree for 30 days.
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