Dell forming mobile phone business unit

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Computer maker Dell said it would create a division focused on communications and mobile devices, a organizational restructuring that further highlights the company's intentions to broaden its reach into smartphones.

The unit will be run by Ron Garriques, currently head of Dell's consumer division. Garriques previously headed cell phone efforts at Motorola, and his arrival at Dell two years ago was one of the factors that sparked speculation about Dell's mobile plans. Under the new restructuring, Garriques' consumer division will be merged with Dell's small-business computer division and run by the small-business unit's current president, Steve Felice.

The long saga of Dell's handset ambitions has picked up steam in recent months. In October, Dell CEO Michael Dell confirmed that the company would be releasing smartphones next year in the United States based on Google's Android platform. Shortly before that, citing unnamed sources, the Wall Street Journal reported that AT&T Mobility might launch a Dell Android phone next year. In November, Dell said it planned to distribute its Mini 3 smartphone in China and Brazil.

Dell is one of several computer makers, such as Acer, to expand into smartphones as the line between handsets and computers blurs. However, Dell likely is to face a range of challenges.

The news is "further confirmation that leading PC manufacturers cannot resist mobile space despite high distribution and differentiation barriers and low probability of success," CCS Insight analyst John Jackson wrote in a research note. "We have no reason to believe Dell will be capable of significant differentiation or disproportionate value capture at this point regardless of platform choice."

For more:
- see this WSJ article (sub. req.)
- see this Bloomberg article

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