The computer maker is laying the groundwork for developing Internet devices--with the catch that any device from the company be compatible with existing PC technology.
Bigger-than-normal pagers that can send and receive e-mail messages, home networking products, and other devices that can link up to standard PC applications intrigue the company, according to executives at Dell's DirectConnect conference here. The Austin conference is dedicated to all things Dell and has featured keynotes from Microsoft chief executive Bill Gates, among others.
The first product to emerge from this effort will be the "Webster," a code name for a sleek new PC coming this fall, which the company showed off yesterday. Although technically a PC, the Webster will emphasize style and ease of use, two common attributes of "Internet appliances."
The caveat, however, is that these devices must be built around, or at least communicate with, the existing PC architecture, said Carl Everett, senior vice president of Dell's personal systems group, meaning that the devices use technology like Microsoft software and Intel processors.
The possible shift into devices with a PC flair reflects both Dell's interest in expanding its business and the company's conservative nature. On one hand, the evolution of the PC into a medium for communication seems to open the door for Dell to enter into the market for items beyond the standard desktop and notebook.
Another force is the plunging price of personal computers, which is forcing many companies to rethink their strategies.
"The things that are attractive are products that hook up with mainstream applications," said Everett. "Watch this space."
Meanwhile, Dell, which many say has been late to the Internet appliance party, is considering its options.
"We're looking at it very, very closely," said Paul Bell, senior vice president at Dell's home and small business products group. "It is really just a question of whether we develop our own, do we [let someone else build] it, or do we sell a third party's products."
Products that are of potential interest to Dell include a big pager, one of which is a currently shipping device called "Blackberry"--which looks like a small calculator--and home networking equipment, said Bell.
What it doesn't make, Dell will sell through Gigabuys, its online store for products from other manufacturers, Bell said.
Speaking of the bigger pager, Everett pulled one off his belt and said: "Products like this make a lot of sense," because they synchronize with standard PC applications. He uses his pager, he said, to receive email and keep his calendar and address book. Home networking products could also potentially catch the company's eye, particularly if they are PC-centric, he added.
On the other hand, the company continues to gobble up market share in the PC arena and has historically been averse to enter emerging product markets. Unlike Compaq Computer and HP, for instance, Dell has not ventured to make a handheld based on Microsoft's scaled down Windows CE operating system.
Thus, Everett indicated that it's unlikely Dell will enter into markets that don't replicate PC capabilities or share the architecture.
"What people want is non-compromised computing," he said.
One aspect that could help Dell considerably is the fact that Intel and PC technology is shrinking at a rapid rate and becoming easier to use, said Everett. PCs are becoming more device-like without forcing manufacturers to change underlying technology.
Intel chips, for instance, are already showing up in these devices. The Blackberry pager is powered by a 386 processor, a predecessor to the Pentium chip. Intel has also begun to place the Pentium into cable and satellite TV set-top boxes.