Dell had several false starts when it decided to enter the smartphone market, but now it finally has a device available, it is roaring ahead with carrier deals. Its first supporter was China Mobile, and then it was added to AT&T's smartphone roster. Now it has added Telefonica, the world's third largest mobile group, in a deal that could take its Android phones into a wide range of markets in Europe and Latin America.
The deal goes beyond just phone supply. Dell will also collaborate with the Spanish giant to develop new products and services. This is typical of Telefonica's increasingly active policy of influencing the design and user experience of its devices, by working closely with suppliers in a manner more usually seen in Japan or Korea. Indeed, it has learned key lessons from its close partnership with Japan's NTT DoCoMo, as well as leveraging its global scale to dictate terms to its vendors.
For Dell's part, it is proving itself highly flexible in adapting its designs and business processes to different carriers and their requirements – supporting the cellcos' wish to drive their own devices is one way for a new entrant to gain good slots with the operators, and muscle in on the less malleable Nokia. In a statement, Dell said "the alliance with Telefonica is part of Dell's continued focus on developing smart mobile products and services through value added relationships with leading operators."
Latin America is seen as a strong growth area for high end to midrange phones, as some of the key countries see rising levels of consumer wealth and mobile web usage. While the highest growth is seen in countries like India, much of this is still at the low end, which is not addressable by Dell without achieving massive scale and altering its margin expectations. In countries like Brazil – where Dell has a deal with cellco Claro – there is more opportunity to tap into expansion of smartphone use, and Latin America is also being hotly targeted by RIM.
Dell's Telefonica deal is likely to include tablets and netbooks, as well as smartphones.
In a joint statement, the firms said the partnership focuses on three areas: "Provide customers with choices they value most now; deliver next generation solutions first; enhance the digital customer experience and drive information communications technologies to market."