Each week Ross Rubin contributes Switched On, a column about consumer technology.
This recent announcement that Dell would not be pursuing new smartphones for the time being following the retirement of its Venue Windows Phone devices raised the spotlight on PC companies -- at least those other than Apple -- and why they have struggled so mightily in the US smartphone market. Virtually every major PC company, including HP, Dell, Acer, Lenovo, Toshiba and ASUS, has either passed completely on entering the domestic market or released only a handful of models without much carrier support behind them. HP, of course, made the largest investment in mobile with the purchase of an ailing developer of devices and operating systems. But even before that Palm slapped its forehead, HP had only casually flirted with smartphones, releasing a few token Windows Mobile smartphones.
PC companies have been fighting the battle with some heavy handicaps.
To be fair to these companies, the investment demands of the ultra-competitive smartphone market have proven formidable for many companies, including many, like Motorola, Nokia and RIM, that were once considered masters of the game. Even companies that have not seen such a prolonged decline, like HTC, can find the tables turned on them in the course of a financial quarter. But PC companies have been fighting the battle with some heavy handicaps.
PCs are sold through many channels; two of the most important are big-box retailers, direct sales, and VARs. These channels are much less of a force in the smartphone market, where most of the distribution is through carrier stores and their agents. The flip side of this is that smartphone companies haven't done well in the tablet market in part because those products have been distributed through more PC-focused channels. PC makers are used to listening to the demands of enterprise customers and consumers in aggregate, but that's a far cry from customizing product for the demands of carriers.
The PC chip market is essentially a duopoly of Intel and AMD, which limits PC OEM choice. In contrast, the smartphone market has a broader range of ARM licensees. Not only is there NVIDIA, Qualcomm and Texas Instruments to name three leaders, but a few major smartphone providers such as Apple and Samsung use their own ARM customizations. Such competition helps to create lower prices, but it also means more tradeoffs from which to choose and more optimizations to really take the best advantage of particular architecture.
While fast compared to the consumer electronics sector, the PC market has longer product development times than the fiercely competitive smartphone market. And while being freed from Microsoft's dictatorial terms might have PC makers celebrating, the old cliché of freedom not being free applies. Google offers less support -- technologically and financially -- to most hardware developers than Microsoft offers to giant customers such as HP and Dell. Of course, one alternative is to build or acquire an alternative operating system. The former option, though, is extremely expensive and risky. And the latter didn't pan out well for HP.
Will the fortunes ever change for PC makers in the smartphone market? While Windows Phone may not be the same thing as Windows, Microsoft would be all too eager to see HP and Dell become high-volume shippers of these devices. As Windows 8 bears more in common with the Windows Phone user interface and creates other ties, PC makers gain more of an advantage than they've had in the past. Microsoft may need the likes of Nokia and Samsung to get the bandwagon rolling for Windows Phone, but it's the easiest one for PC makers to hop aboard if it can get rolling.
Ross Rubin (@rossrubin) is executive director and principal analyst of the NPD Connected Intelligence service at The NPD Group. Views expressed in Switched On are his own.