Dell and Sony Ericsson aim for bite of Apple

Apple's bestselling iPhone is to face more competition, as Dell and Sony Ericsson up the ante.

Last Updated: 31 Aug 2010

The world’s second largest PC maker, Dell, has confirmed longstanding rumours that it is to go head-to-head with Apple in the smartphone market, while rival Sony Ericsson has appointed a new chief exec with a mission to revamp the firm's flagging fortunes.

Chinese mobile operator China Mobile yesterday unveiled a Dell-branded smartphone running Google’s Android mobile operating system, described by Dell as a ‘proof of concept’ prototype. The company also confirmed that it is in talks with China Mobile on launch plans for the phone, although exactly when it will hit the streets of Beijing, Shanghai et al remains uncertain.

Meanwhile, on the other side of the world in Helsinki, underperforming mobile JV Sony Ericsson has a new boss, Bert Nordberg. Currently head of the firm’s US division in Silicon Valley, Nordberg will replace Dick Komiyama who retires at the end of this year.

Coming as they do within 24 hours of one another, the two announcements mark a distinct upping of the pace in the market for high-performance mobile phones, and may give even all-conquering Apple a momentary pause for thought. For Dell in particular it marks a complete volte face, as founder Michael Dell has previously ruled out entering the market for fear of brutal competition.

So what’s changed - why suddenly all this interest in smartphones? After all, unless you’ve been stranded on a desert island for the past three years (or worse, stuck out in the boonies with no 3G coverage), it’s not exactly news to anyone that the iPhone is a smash hit.

Well, technology developments like the Android OS have certainly made it far easier for non-mobile specialists to put up a decent product without breaking the R'n'D bank. But perhaps the most compelling reason is that, along with netbook mini-laptops, smartphones are one of the few genuinely profitable parts of the consumer technology landscape at present (one of the reasons why BlackBerry maker RIM has just been named the world's fastest growing company). So naturally everyone wants a piece of the action.

That’s the theory; the practice could be a little less straightforward. Both these companies face what therapists would call ‘issues’ that will have to be worked out before they can get anywhere near Cupertino’s finest.

For starters, Dell’s brand: it may help shift millions of sensible laptops to corporate buyers, but can it woo the much more image-conscious smartphone user? Steve Jobs is unlikely to lose too much sleep over his new competitor for this reason alone.

As for Sony Ericsson, as an amalgam of two such big names, this firm should already be one of Apple’s deadliest rivals. And yet it has consistently failed to live up to its promise, posting net losses for the past four quarters and with market share languishing at a dismal 4.7%. Its only real success to date has been in mid-market music phones for cash-strapped teenagers – a pretty low-margin niche.

Nordberg’s appointment is the first step in a planned turnaround for Sony Ericsson, which if successful might just produce a company that really does have the potential to dent the iPhone’s aura of invincibility. But he’s got an awful lot of hard work to do before he can even think about doing that. Watch this space.

In today's bulletin:

City surprised as inflation sticks at 1.8%
Dell and Sony Ericsson aim for bite of Apple
Worst is over for property and car sales?
Directors got 65% of maximum bonus last year
Jobs at risk as Ryanair grounds 90% of its Manchester flights

Find this article useful?

Get more great articles like this in your inbox every lunchtime