Sunday, November 15, 2009

Mini 3 could give Dell a 1% share in smartphones by 2010

While Dell's Android based, Mini 3 has been criticized on the grounds that it cannot stand out in a crowded market and is an also-ran product.

The innovation by Ron Garriques and Dell does not lie in the phone. The innovation is in the strategy.

The strategy leverages the relation with a large operator to enter Chinese the market rather than following the traditional route of a US focused launch. Dell would be the first smart phone manufacturer to acknowledge the influence China would exert on the global smart phone market by 2015.

The global smart phone market for 2010 is expected to be around 235 million of which China is expected to contribute 30 million.

We estimate that the distribution reach offered by China Mobile, would give it a 5.5% market of the Chinese, translating into 0.7% share in the global market. America Movil's, Claro could add another 0.05% in Brazil.

The remaining 0.25% market share could be achieved by by leveraging the agreements Dell has with lots of other operators like Vodafone in Europe, Australia and New Zealand.

The 1% share could be achieved by mid of 2010.

While the US or global launch has not been accounted for, success in China could build momentum and drive Dell to to a market share of close to 3% making it the 5th largest smart phone manufacturer.

This is the first time that an entry into the global smart phone market has been attempted outside the traditional US and European markets. It would be interesting to see as to how the strategy unfolds