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Dell: Dude, What Did You Do With Your Cellphone?

Eric Savitz

So, uh, wasn’t Dell (DELL) supposed to be working on a cellphone?

Well, that was the scuttlebutt. But Dell has failed to show at recent mobile trade shows. Shaw Wu, an analyst at Kaufman Bros., asserts in a research note today that the company’s first attempt was basically rejected by the carriers as too, well, Dell-like.

He asserts that Dell showed a prototype to the carriers, but that they weren’t all that impressed. “From our conversation with supply chain and industry sources, it appears that it ultimately came down to lack of carrier interest and small subsidies, making it difficult for Dell to make a profit,” he writes. “In our view, the last thing Dell needs is to enter another money-losing business as it seeks to preserve its operating margins of 5-6 percent.” (Which he notes compares to Hewlett-Packard at around 11 percent, and Apple and IBM at 15 percent.)

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