Dell Gives Up on Smartphones

Dell (Nasdaq: DELL  ) has dropped the mobile ball. Badly.

The iconic PC maker took a shot with Google (Nasdaq: GOOG  ) Android devices, none of which saw even remote commercial success. Dell axed its domestic tablet offerings late last year, mostly blaming the operating system itself for its shortcomings. The company is now embracing Microsoft (Nasdaq: MSFT  ) Windows 8 as its next big mobile bet.

At a recent security and risk management conference, CEO and founder Michael Dell said to expect his company at the launch of Windows 8 to have a slew of devices ready, such as tablets, hybrids, and convertibles. Dell called the next-generation OS an "evolutionary path for Windows into tablets."

A tablet is in the cards, but Dell made it clear that smartphones are now off the table altogether, saying, "You're not going to see us in phones, not in terms of hardware." Instead, Dell will look at security and management software that supports both Apple iPhones and Androids. So instead of trying to go head-to-head with the iPhone, Dell will try to ride its success by supporting the device.

In recent times, Dell has been snapping up companies to shift its strategic focus to look more like IBM (NYSE: IBM  ) , boosting its security offerings with the SonicWall acquisition, in addition to virtualization plays like Wyse Technology. Unlike Hewlett-Packard's (NYSE: HPQ  ) high-profile botched attempt to get out of the PC business, Dell has no intentions of following suit. The company remains committed to traditional PCs but knows that virtualization is the future.

Getting out of the smartphone business is a safe bet, because it's clearly not Dell's forte. It's a shame to miss out on that piece of the mobile pie, but Dell might be able to make up for it by jumping on the tablet segment of this ride.

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Fool contributor Evan Niu owns shares of Apple, but he holds no other position in any company mentioned. Check out his holdings and a short bio. The Motley Fool owns shares of Microsoft, IBM, Google, and Apple. Motley Fool newsletter services have recommended buying shares of Google, Microsoft, and Apple and creating bull call spread positions in Apple and Microsoft. The Motley Fool has a disclosure policy. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.


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