Boom in smartphones. Is their room for new players such as Dell?

On March 11, 2010, in Uncategorized, by rohit
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Smartphones are growing at a rapid speed in the mobile handset market. There are few evidences to back this statement.

The report of IDC says that the converged mobile device market has seen a growth of about 30 percent in 2009. The report also mentions that this growth momentum will continue even this year.
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Paul Jacobs, the CEO of Qualcomm, believes that the market for smartphones will split into high-end segment and low-end segment. He says that this is a trend that is speedly eroding the feature phones market.
The Yankee Group’s survey of 2009 had found about 43 percent of consumers of US plans to take smartphones their next mobile device.

Well, one question arises. Is is that all these reports is a gesture to smartphone market for new vendors?

If you look at the recent news of Palm and Garmin, it indicates that the market of smartphones is in fact not profit panacea that one would expect. According to Palm, the manufacturers is now expecting a full-year revenue going below what it had estimated earlier of $1.6 billion to $1.8 billion. The reports of Garmin is also similar. The company is till date “disappointed” with its nuvifone products sale. These can also give a jerk to new players in the market such as Dell, LG, Acer and other.

Ramon Llamas, analyst of IDC’s smartphone, said: “Instead of, ‘If you build it, they will come,’ it’s turned into, ‘If you build it, will they come?”

Lamas further mentioned that the two, Garmin and Palm, faced unique challenges. So far the marketing effort of Palm targeted the “Valentine’s Day” potential customers and not the traditional smartphone early adopters. He explained that Garmin suffered promotional scarcity and its ecosystem too much relied on interest in mapping and directions.

John Jackson, the CCS Insight analyst, said: “We knew that Palm would launch the Pre into the teeth of new flagship products (or revs of products in Apple’s case) from Apple, RIM, HTC and others.”

Jackson added further, “The same is true for Garmin, compounded by the issue of Google (and now Nokia) basically undermining the navigation proposition with freeware. Without a portfolio, a limited number of stock-keeping units (one in Garmin’s case and basically two in Palm’s case) are that much more likely to get lost in the mix. Apple is the exception, but that success story is well known at this point.”

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Dell improves marketing strategy to make consistent in profit

On March 7, 2010, in News, by rohit
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An executive of Dell recently told to the Reuters news agency that the company is seeking for acquisitions so that it can bolster its consumer, the small and medium sized businesses that accounts for about half the sales of Dell.
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President of Dell ’s newly created consumer, small and medium business said on Tuesday to the news agency over a telephonic interview, “You will see acquisitions from us.”

He also added further in the interview, “They’ll be pointed toward the strategy that we have as a company and one of those key strategies is increasing the solutions so that we can be the best-value solution provider to customers.” He mentioned that Dell was basically looking at the key areas like the systems management and also the security.

President said, “Because of the great cash performance of the company, we ended the last quarter with approximately $11 billion in cash. So… we really have little limitation in what we can do and so it’s just going to come down to the return that we can get and how that meets our profile for delivering good returns to our shareholders.”

In 2009 the company bought Perot Systems, the technology services provider, for $3.9 billion. This was the largest ever acquisition of Dell in order to expand the technology services business and also to compete with giants like Hewlett-Packard Co. and IBM.

Dell, from the sale of personal computers generates over half of its revenue. Now it has diversified itself from PC to higher margin businesses like technology services. This was because the profit margin of the company was hurt drastically by the sales of lower-priced PCs.

Dell computers also competes with Acer and Lenovo. Last month the company said that it is focusing on the improvement of profit in the consumer business, which had hurt the overall gross margin performance of the company.

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