realm of deals that seem technically sound on paper, but are uncertain when it
comes to execution, Dell Inc. (DELL) has entered an alliance with Chinese internet
giant Baidu, Inc. (BIDU) to produce tablets and smartphones.
Much like rival Hewlett-Packard Comp. (HPQ), Dell has struggled to find the success in the
mobile devices market that it enjoyed in the PC market. In fact, just days before HP's highly
publicized decision to discontinue the TouchPad, Dell quietly discontinued
its Streak 5 tablet (August 15), posting a page proclaiming, "Goodbye,
Streak 5. It's been a great ride."
Interestingly, Dell's decision to kill the Streak apparently doesn’t apply to
the Chinese market. In fact, the Streak 5 is expected to be its first
Baidu-branded smartphone to hit the market. A Dell spokeswoman stated,
"We have a partnership with Baidu and you know we have the Streak 5
tablet, so the partnership will be in that space."
Over the summer Dell launched a 10-inch
Streak exclusively in China, skipping the U.S. and European markets.
While Dell still maintains the Dell Streak 7 (inch)
tablet and the Venue (Android) and Venue Pro (Windows Phone 7)
smart phones in the U.S., the company seems more focused on winning over the
lucrative Chinese market.
China has an estimated 906+ million mobile
phones in operation, making it nearly three times as big a market as the United
Apple, Inc. (AAPL) has seen a great deal of success in China with
its iPad and iPhone, which are viewed as status symbols among Chinese
professionals and youth. One Chinese youth even sold his kidney to
purchase an iPad.
Meanwhile Baidu, a company some say closely parallels America's Google Inc. (GOOG), has thus far sat on the sidelines during the
device war. Now the company is finally preparing to strike, but it is
unclear whether it will opt to build its own proprietary operating system or go
with the OS currently used in Dell's streak series -- its rival Google's
Regardless of its choice, Dell is clearly hoping to cash in on Baidu's strong
brand recognition in China. But analysts say that may not happen.
States Michael Clendenin, managing director of technology
consultancy RedTech Advisors, in an interview with Reuters, "I
suspect this is just Dell, who has a lot of problems on the mobile and tablet
front, grasping at straws to get any kind of publicity that it can to make its
product more attractive. Ultimately in China, I still think it is Apple's game,
still for the iPad and iPhone."