Dell Deal: AT&T Clutters Up Its 3G Network

PC also-ran firm Dell (NASDAQ:DELL), desperate to get into new lines of business, has launched its Android-based handset, the Mini 3. Dell announced that AT&T (NYSE:T) will be offering the phone to subscribers to its cellular service. That will allow the phone company to further burden its already strained 3G network troubled because of the huge data traffic load created by the iPhone. Current AT&T Wirless customers should be displeased.

AT&T’s partnership with Dell is likely to anger Apple, which sells the iPhone exclusively through Ma Bell. The Dell handset uses the Google (NASDAQ:GOOG) Android operating system which is encroaching  on Apple’s smartphone market share. AT&T’s actions make it more likely that Apple will arrange to sell the iPhone through AT&T rival Verizon (NASDAQ:VZ) later this year. Apple probably sees the Dell phone is a way for AT&T to cut back on its reliance on the iPhone as its primary way to get new subscribers.

Dell has done some research to support its move into the smartphone business. The data shows, among other things, that “Nearly 90 percent  (of those polled) say they would consider purchasing a smart phone from a highly regarded technology company as an alternative to leading smart phone manufacturers.” Dell is not “highly regarded” by many consumers so the PC company has an uphill battle.

Douglas A. McIntyre