Dell Inc.’s move into the smartphone market is risky but could provide the computer maker with a service-based revenue stream rather than another device producing low profit margins.
Round Rock-based Dell (Nasdaq: DELL), which revealed in November that it planned to launch a Mini 3i smartphone in China, could enable revenue sharing by bundling, much like it has already done with its netbooks, industry observers said.
During last month’s quarterly earning call, Chief Financial Officer Brian Gladden said Dell’s smartphone business will be “carrier-centric.”
He said the company’s smartphone play is a natural extension of its netbook business, which Dell sold with service provided by AT&T Inc. (NYSE: T).
Netbooks are scaled-down and more compact laptop computers that have proven popular with consumers because of their low cost and mobility. But like smartphones, netbooks provide more profits from the wireless service subscriptions than from the devices themselves.