Dell Mobile Is Gone, a Victim of Incompetence

The mobile division of Dell (DELL) is no more. The company is shutting it down and Ron Garriques, who was in charge of the group, will leave the company in January. It must be a bitter disappointment to CEO Michael Dell, who brought Garriques in from Motorola (MOT) as part of a turnaround for the company.

Dell is trying to pass this off as a strategic move as mobile devices have "grown to be more than a consumer-focused initiative." As if they ever were. No, this is a case of a business division delivering slowly and sloppily one product after another. And the Dell Venue, the company's Microsoft (MSFT) Windows Phone 7-based smartphone, was the final screw-up.

Dell -- man and company -- wanted to move beyond the core business of selling computers, which has become a low-margin business and will only get worse over time. They saw the profit that Apple (AAPL) has pulled off and wanted some of that for themselves.

Dell originally hired Garriques in 2007 to run the consumer business, and sales went up -- but margins went down. Not all that surprising, giving the general direction of consumer PC prices. But, hey, he was from Motorola and so must have known how to do mobile. After all, Motorola was at the top of its game back when Garriques joined Dell, right? Nope.

But he was moved into the mobility group, and things got rocky. The division released a number of products, but not too well and mostly late. Its first phone, the Dell Aero, lagged the market long enough that its features were underwhelming by the time it hit the market. The Streak, a "pocket tablet" with a 5-inch screen arrived in August 2010. But it was a year behind schedule and running Android 1.6, which was released in September 2009. Google has had two releases of Android since, the most recent in late May 2010.

It was a bad start, but the kiss of death was actually the Dell Venue, a smartphone that runs Windows Phone 7. It hit the market pretty much on time -- saints be praised! -- but with massive battery and Wi-Fi problems that gave Dell a black eye and left it on the hook to replace who knows how many units. (The company planned to use 25,000 for its own employees.) And when you've just started to come back from a lawsuit alleging that you sent out gazillions of PCs that you knew to be bad, this is exactly the sort of thing you don't want to see.

The easy prediction is that things will continued to be messed up for some time at Dell, as the company tries to break up the product development and marketing groups and figure out where in the company to put them. Absent some miracle -- or the arrival of a real superstar who could reform Dell's processes and make them work smoothly -- figure that Dell will end up completely dropping phones and tablets.

Of course, Garriques gets millions next year for "consulting" he does for Dell. Maybe he'll be the one they point new managers to and say, "Watch him and do something different."

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