Can Dell Beat Apple to the Punch?

Can Dell Beat Apple to the Punch?

Dell may hate itself right now, as the PC giant keeps trying to convince investors that it's not worth very much. But that's not stopping the company from wanting to ride the next possible wave of computing.

Dell exec Sam Burd recently told The Guardianthat Dell may get into the wearable computing game soon. That's a market that Apple is widely expected to jump into soon with an iWatch, although Google is set to be the first mover with Google Glass. Dell continues to explore "ideas in that space," and Burd made comments that suggest Dell's strategy may compete more directly with Apple's rumored smartwatch:

There are challenges in cost, and how to make it a really good experience. But the piece that's interesting is that computers are getting smaller. Having a watch on your wrist -- that's pretty interesting, pretty appealing.

Dell's core business still relies on the PC market, which isn't doing very well right now. For the end-user computing segment that includes PC sales, sale revenue fall 9% last quarter to $8.9 billion, while generating just a 2.5% operating margin. A year ago, the business had a 6.5% operating margin.

The company has made several attempts to crack the mobile market but never found success in smartphones or tablets. Dell has made it quite clear that it has no intentions of getting back into the smartphone market, although tablets are a different story. The success or failure of Microsoft Windows 8 and Windows RT will determine the fate of Dell's tablet business.

Smartwatches could be the next evolutionary step in mobile computing, and Dell clearly wants in. The Pebble smartwatch is off to a strong start. Samsung has announced its intentions with its Altius. Google is reportedly making a smartwatch and gaming console to compete. Dell might beat Apple to market, but the company probably can't beat Apple in the market.

Wearable computing may easily become the next major battleground among the five biggest tech giants. That will add to an already extensive list of competitive areas where war is already being waged. The war is just beginning, but who will win? Get briefed on the current state of combat by clicking here.

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Fool contributor Evan Niu, CFA, owns shares of Apple. The Motley Fool recommends Apple and Google and owns shares of Apple, Google, and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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