Can Dell's Web Gadget Beat the iPhone?

Dell has a serious chance, but given the history of failed attempts on Apple’s crown, the odds favor Apple.


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I know about as much about this rumored Dell handheld gadget as you do, which means I don't know much. But this leaves me free to speculate about what it should be and whether Apple is vulnerable.

Actually every vendor is vulnerable, from Cisco to Oracle, from Microsoft to IBM, it's simply a matter of defining what those vulnerabilities are and determining if the challenging company has the right resources to take advantage of them.

Dell is one of the companies that may have these resources. Nokia, Microsoft, and even HP fill out the list of firms that could, if they used the right approach, take significant market share from Apple.

Apple's Vulnerabilities

Apple is a premium vendor who is addicted to comparatively high margins and is used to getting them. To hold those margins they have had to cut deals with cell phone providers that those providers don't like. That’s why you often see AT&T aggressively marketing Smartphones that don't come from Apple.

Apple partners poorly, in fact they are kind of famous for really sucking in this area, which means they generally have to do things all by themselves. This does create a certain unique consistency in their offerings but it limits them in terms of breadth.

And their developers have a history of being somewhat disloyal because they often view Apple as disloyal to them. This is kind of interesting given the almost rabid loyalty of the Apple customer base.

Apple isn't particularly agile. This likely largely comes from Steve Jobs himself, but once they are on a particular course they don't seem to want to change it. This doesn't mean they don't alter products. But it often means they don't reverse what may have been a bad decision; instead they will worry it until the bad decision seems to look like it became a good one.

MobleMe was an example of that and slowed significantly Apple's ability to work with Exchange for email. Eventually they fixed it but the Palm Pre worked with Exchange on Day One because Palm took the better initial path. Internally they appear to still be fighting whether to put a keyboard on the iPhone, something that Palm also figured out and had from the start. The lack of a replaceable battery is another problem.

Finally, and specific to the iPhone, they don't really own the solution. They have tried to contract around this but, in the end, the various carriers control a significant part of the user experience.

Historically this has been one of the few areas to draw nearly consistent criticism, as they have often picked unpopular carriers. Granted, in this instance, Palm actually did worse with Sprint. But in their case they only signed up for six months, five years.

Building an iPhone-Beating Gadget

I've often thought the iPhone was a strategically foolish product for Apple because it overshadowed the vastly more interesting, (given Apple's need for absolute control) iPod Touch.

It is amazing the number of people I know who have a cell phone, often a Blackberry, that they use as a phone and an iPhone that they have for status and because they like the iPhone. Given that appears to be a common usage model, then an obviously interesting product to go after is not the iPhone but a better iPod Touch. Offer an iPod Touch that could, for a vastly lower monthly charge, be used in concert with an existing cell phone rather than replacing it.

Next Page: Bottom Line: Can Dell Beat the iPhone?

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Tags: Microsoft, iPhone, Dell, HP, carriers

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