Dell Bows Out Of Smartphone Market

By Khurram Aziz | Dec 14, 2012 12:38 PM EST

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Dell has no intention of making smartphones, according to the company's vice chairman Jeff Clarke.

Speaking at the Dell World conference in Texas, Clarke said that the PC maker is pulling the plug on the smartphone business, globally, which means turning its back on a market expected to reach $150.3 billion by 2014.

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"We've been really clear about smartphones - we're not going to do smartphones," said Clarke, as reported by Computer World. "We're not going to be in the smartphone hardware business. We're going to provide smartphone solutions, we're going to be the preferred [bring-your-own-device] provider of solutions in the marketplace."

Dell had entered the smartphone and tablet market with devices such as Streak, Aero and Thunder, all featuring Google's Android operating system. But Clarke said margins for Android are so low that it's not profitable for them.

Both Google and Amazon sell devices at no profit margin, or at a loss, only to make up for it in advertising or content revenues.

"It's a content play with Android. Amazon is selling books and Google is making it up with search. So far we couldn't find a way to build a business on Android," Forbes reported Clarke as saying at the conference.

Instead, Clarke said Windows 8 tablets will be the company's focus in the emerging market of hybrid mobile devices.

"We believe Windows 8 brings a lot to the tablet market. It allows us to put tablets in the hands of our customers with a form and a set of management tools they are very used to using," Clarke said.

"They know how to manage these things, they know how to secure these things, they know how to provision, they know how to deploy them. It's one of the beauties and advantages of a Windows-based ecosystem now that we have tablets there."

Dell's current touchscreen Windows 8 devices include the XPS 12-inch convertible Ultrabook, the XPS 10-inch running Windows RT and the Latitude 10-inch tablet running Windows 8 Pro.

However, Windows 8 tablets have struggled to sell as expected. Microsoft, which produces the flagship Surface slate built around Windows RT, is on track to sell some 500,000 units in the December quarter, below the expected sales of up to 3 million.

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