Dell is going to launch its latest assault on the hand-held device market with the release of a handset called Aero. It's going to be available in the US only but that's a big enough market; it will cost $99 on contract.

It's a move that will surprise many, for two reasons. First, it's based on Google's Android operating system. This is reasonable and as a platform it's overtaking Apple's iOS, leading Apple further into a similar position to the one it occupies in the computer market - a minority system but one in which it has a 100% market share, so the profits remain constant.

The Android system is open to anyone, of course, and this is where Dell might find its greatest strength working against it. It's used to working in a multi-vendor market and doing OK - it sells Windows PCs for goodness' sake - but it's also very well aware that this market tends to carve itself up on price alone.

This is what's behind the company's attempted acquisition of 3Par - Dell wants more of the Cloud, it needs to position itself away from selling low-margin tin. Another Android phone in the market is probably not its best way of achieving this.

The other reason people might be a bit bewildered is that Dell's previous foray into hand-held devices of any description was the ill-fated Axim PDA. Launched directly against Compaq's early entry into the market, the iPaq, the range kicked off in 2002 and fizzled in 2007. It was, yes, another Windows-based PDA just like all the others available at the time, and of course the only way the company could compete in the end was on price.

Which is why the phone is a baffling idea. A company that recognises that it has to move into areas in which it can differentiate itself a lot going into places in which the only possible conclusion is a price war.

Any readers with any ideas as to why this makes sense are welcome to comment!

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Last Post by extremeb
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