Dell Brands New Handhelds

By Susan Kuchinskas

October 15, 2003

The Round Rock, Tex.-based computer maker shoots for the cheapest unit on the block with its new Axim X3 and X3i.

Dell today announced a new family of PDAs. Available in three configurations, the Axim X3 line is lighter and thinner than Axim5s. One model, the Axim X3i, includes integrated Wi-Fi connectivity.

The devices, running on Intel XScale processors at 400 or 300 MHz with 64 or 32 megabytes of SDRAM, are priced at $379 for the Wi-Fi-enabled X3i and $299 or $329 for non-wireless configurations. This announcement follows HP's launch on Sunday of its own Wi-Fi-enabled PocketPC PDAs, the iPAQ h4150 and iPAQ h4350. Priced at $449 and $499 respectively, HP's models include Bluetooth as well as Wi-Fi .

Round Rock, Tex.-based Dell is the second largest provider of PocketPC devices, following HP, according to IDC -- but it's a distant second.

"Dell has a need, if it's going to be a top-tier player in the handheld space, to be more aggressive in how quickly it brings new products to market and updates its product designs," IDC analyst Alex Slawsby told InternetNews.com. He pointed out that Dell's last new handheld release, the Axim X5, shipped in November of 2002.

Dell isn't known for innovation, Slawsby said, but for exactly what it did with the Axim3 release." Dell has a lot of experience in entering an established market," Slawsby said, "and bringing in products that match existing technologies at lower price points."

The lower cost of Dell's Wi-Fi handheld comes at the expense of Bluetooth, standard in HP's iPAQs. Bluetooth provides very short-range wireless connectivity that would allow the PDA to connect with a laptop or peripherals such as a printer.

"In some environments, that might be worthwhile," Slawsby said. "Bluetooth has yet to catch on in the U.S., but it's getting more momentum in Europe." Consumers in the U.S. are not yet demanding Bluetooth connectivity, he said.

That may change before Axim3 buyers are ready to buy again, Gartner Dataquest analyst Todd Kort told Internetnews.com. "Sure Bluetooth has struggled," he said, "but people keep these devices for two to three years. Dell is saying, 'We don't think you'll need Bluetooth in the next two to three years,' and I think that's wrong."

Kort was unenthusiastic about the look of the Axim3. "It looks like some kid in a Round Rock, Texas high school designed the thing," he said.

Scott Summit, principal of Summit Design, an independent industrial design firm that most recently designed the Zodiac gaming PDA for Tapwave, wasn't so hard on Dell.

"This design won't offend anyone," he said. "It also won't excite anyone." But that's the Dell way -- selling a lot of product at very low margins. "If they had a design that was controversial or unexpected or dramatic, that's not working to their benefit," Summit said. "That's not what their market is. They have to have a product that's bombproof robust and doesn't get returned."

In other words, with the Axim3 series, Dell is betting that more people are buying PDAs as tools than as fashion statements. It's not a sure bet.

Said Kort, "I don't think the PDA market has matured to the stage where PDAs are generic yet. Dell is saying to the market, 'There's no value in industrial design, therefore we paid no attention to it in order to hit the lowest price point." I think they've made a mistake."

Originally published on .

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