Here’s How Dell and Baidu Plan to Dominate New Tablets and Smartphones
Dell (NASDAQ:DELL) is partnering with Baidu (NYSE:BIDU), China’s top search engine, to develop tablet computers and mobile phones for the Chinese market, which is currently dominated by Apple (NASDAQ:AAPL) and Lenovo devices. China is home to over 900 million mobile phone subscribers, and is the fastest growing market for tablets.
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Dell (NASDAQ:DELL) will be able to leverage its relationship with Baidu (NASDAQ:BIDU), which is one of the best known brands in China, in order to become more widely recognized in China. Dell could launch its new devices as soon as November, according to inside sources. A Dell spokesman said, “We have a partnership with Baidu and you know we have the Streak 5 tablet, so the partnership will be in that space,” adding that the two will also be partnering in the creation of a new handset. The Streak 5 tablet is a five-inch Android-based tablet that was discontinued in the U.S. last month.
Baidu has seen its Nasdaq-listed shares gain 50% in the last year after Google (NASDAQ:GOOG) exited the market. Baidu currently has an 80% share of China’s search market, and Dell hopes to leverage that to increase its own market share. “All PC brands are trying to differentiate themselves from each other in the mobile space, and Dell’s tie-up with Baidu may give it first-mover advantage in the China market,” said Hanna Chang, an analyst with SinoPac Securities in Taipei. We’ll have to see whether this news affects any strategies currently being employed by Microsoft (NASDAQ:MSFT) and Nokia (NYSE:NOK) after their big partnership.
Last week, Baidu (NASDAQ:BIDU) launched a new mobile application platform, and is currently working on a mobile operating system, like that of Google’s Android, to be used on smartphones and tablet computers. Dell’s partnership with Baidu will involve the company’s new mobile platform. During the first quarter, Dell’s China sales grew 22% while its retail presence exceeded 10,000 sales points.