Dell onto a Good Thing

Computer maker Dell has said that it will enter another sector of the handheld market, a move that could spell bad news for Canada's RIM.

The Texas-based company will begin selling handheld devices made by start-up Good Technology in the coming months. The product will be targeted at corporate users, connecting them to office e-mail systems for the delivery of messages while on the go.

For Dell's part, the move should bring it closer to its goal of achieving $60 billion in annual revenues. The development follows Dell's entry into the PDA and printer market last year. In less than a year, Dell has captured 5 per cent of the global PDA market with its low-priced Axim models, mainly at the expense of market leaders Palm and HP.

The company's entry into the world of mobile e-mail over handhelds could be just as troublesome for its former partner, Canada's Research in Motion (RIM), which makes the Blackberry wireless e-mail device.

Although available in Europe, BlackBerry's strongest market by far is in North America, where its popularity led users there to dub it the "Crackberry" on account of its addictive nature.

Dell's history of pushing prices below those of competitors, thanks to its airtight supply chain and lack of R&D expenditure, has turned the firm into a fearsome competitor with a 'no mercy' reputation. HP, IBM, Palm, Gateway and many others have suffered falls in market share in all hardware sectors in which they compete with the Texas-based manufacturer.

An even more worrying sign for other hardware makers is that Dell president Kevin Rollins said this week in Texas that the deal with Good Technology "is part of an overall wireless strategy." He went on to say that the firm would continue to expand and broaden its wireless product offerings, although he flatly denied that company would get in on the mobile phone sector.

It's expected that Dell will form partnerships with other, smaller wireless firms that have done the legwork in bringing a new wireless product to market but need a bigger outlet to sell through. This is a strategy that Dell has employed in other sectors, from storage computers and printers to PDAs, and for Dell it has been hugely successful.

Good will undoubtedly benefit from the deal as well, as will its brand and revenues from wireless e-mail products, which are both currently less significant than RIM's. Though the firm already makes its G100 devices and the GoodLink software to tie it to e-mail servers, it's expected that the deal with Dell will eventually result in a new handheld. © ENN