Dell downplays PDA opportunities

Despite rapid success in the handheld computing market, Dell Inc. doesn't see a large opportunity in that market over the short term and will continue to focus the majority of its efforts on the servers, storage and networking markets.

Speaking Wednesday at MIT's Emerging Technologies Conference in Cambridge, Mass., Dell Chairman Michael Dell said he does not expect the market for PDAs to grow significantly over the short term.

"The PDA market is a small in more ways than one. We entered the market just a few quarters ago and got 37 percent of it that fast," Dell said. "It is not a huge market and it won't have the focus for us of, say, the storage market. It has a long way to go before it is a super high volume market."

Dell said no one has yet to figure out the right hybrid device that sits between a PDA and a smart phone, and there probably is not any burning market need to do so.

"We are not there yet in terms of getting such a product right, but I don't think it will come down to just one device. You will always have different users with different needs so there will continue to be a variety of devices. You need to converge data but you do not need to converge devices," Dell said.

During an on-stage interview about innovation, Dell said his company's greatest innovation is its business model, which includes its ability to bring suppliers into its Web-based supply chain almost immediately, allowing the company to turn over its inventories 100 times a year.

"Innovation can manifest itself in many different ways, including technology, processes, manufacturing, supply chains, distribution, and logistics," Dell said. "Inventing things should not be confused with innovation. If you can make users money then at Dell you are an innovator."

Dell added, however, that his company still aggressively pursues technological innovation, investing US$500 million a year in research and development and is currently the holder of 1,000 patents.

"But our job is not to reinvent things Microsoft or IBM have done. Our job is to find out what users' requirements are," Dell said. "And because we have several ways of working with them directly through our business model, we have a pretty good hold on the pulse of what they need."

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Ed Scannell

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