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According to The Wall Street Journal, China Mobile (NYSE: CHL ) has brokered a deal to introduce a Dell-branded smartphone within the borders of the Sino superpower soon. The phone, dubbed the "mini3i," will support music, games, and software sold through China Mobile's version of Apple's iTunes.
Anyone else see this as a huge loss for Apple? Notice I didn't say that this is a huge win for Dell. Perhaps it could become one over time, but we have yet to see what Dell's smartphone can do. We don't know how it will be positioned to compete against Research In Motion's (Nasdaq: RIMM ) BlackBerry, which China Telecom is negotiating to carry.
If I'm not optimistic that Dell will create a globally competitive smartphone, it's because software is increasingly what distinguishes the great handsets from the good, and the good from the bad. For the iPhone, it's the iTunes App Store. For the BlackBerry, it's push email. For Nokia (NYSE: NOK ) , it's the market-leading Symbian OS today, and Microsoft's (Nasdaq: MSFT ) Office Mobile tomorrow. Dell has zero experience with software.
What's that? Dell doesn't need software, thanks to Android? Fine, but how would an Android-powered mini3i set itself apart from other Android handsets? How would it beat HTC's touch-screen phones? How would it compete with the feature-rich Palm (Nasdaq: PALM ) Pre on our shores?
That's assuming Dell even gets a chance to sell a smartphone here in the U.S. -- it may not. The "mini3i" is for China, and that's bad news for Apple. Hundreds of millions of would-be iPhoners will now get a Dell, or a BlackBerry, or avoid smartphones altogether.
Dell didn't win this round. Apple lost it.
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