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Rebuffed by western cellcos, Dell turns to China and retailers

Eastern promise for smartphones

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Although it failed to impress US and European operators with its smartphone prototypes, Dell is certainly not giving up, and is reported to be pursuing deals with retailers and with China Mobile. Chinese news sources report that the giant operator is likely to launch two Dell handsets later this year.

Analyst Zhang Jun of China's Web MKI told PC World that China Mobile is currently evaluating phones from Dell, with a view to creating a co-branded product running the cellco's own software platform. The largest Chinese mobile operator is determined to retain the upper hand in the balance of power and brand with handset makers, and to take a Japanese-style level of active involvement in development. In particular, it has said it plans to create its own software platform, called Open Mobile System (OMS), based on Android but with specific operator variations at all layers, and it will also open an applications store to support this.

Such a scenario clearly requires one or more biddable handset partners, and Dell could well step in, alongside various Chinese suppliers, since it would gain such a major springboard for the mobile market via Mobile's huge user base. It would not only have to support the China-specific operating system, though, but would also have to incorporate the TD-SCDMA 3G standard, as well as GSM. Dell will also offer a TD-SCDMA netbook with the launch of its Inspiron Mini 10 in China this week.

According to Zhang, other vendors working on TD-SCDMA/OMS phones include Huawei, ZTE, HTC and Lenovo. The last of these should get to market first with the so-called OPhone.

For its native US market, Dell is looking to sell through retailers and online, according to a research note from Ashok Kumar of Collins Stewart. "The carriers, who see products from all the leading handset vendors, have decided to pass on Dell's handset," he wrote. "Some carriers are citing a non-compelling product with a roadmap that lags competition."

Copyright © 2008, Wireless Watch

Wireless Watch is published by Rethink Research, a London-based IT publishing and consulting firm. This weekly newsletter delivers in-depth analysis and market research of mobile and wireless for business. Subscription details are here.

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