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For the second time in less than a year, Dell is reorganizing its business
divisions, this time adding a communications division to head up its smartphone
initiative and combining its consumer and SMB divisions into a single division.

A Dell spokesman tells Channel Insider that the combination of the consumer and
SMB divisions will simplify the company’s operations and reduce costs, but
won’t impact the company’s fledgling 2-year-old PartnerDirect channel program.

"We believe the synergies between consumer and SMB will allow us to
streamline how we go to market, reduce costs and build a value proposition for
customers in both segments," Dell spokesman David Frink tells Channel

Members of Dell’s channel organization could not immediately be reached for

But the differences in the go-to-market strategy for smartphones compared with PCs
and servers, and combining the consumer and SMB divisions into a single
business unit certainly raise plenty of questions.

Dell’s increased focus on smartphones and other mobile devices comes after the
company announced earlier in the year plans to offer its own smartphone, first
in the Chinese market. Dell was to release its Android-OS-based Dell Mini 3i
smartphone in partnership with China Mobile late last month.

Go-to-market strategies for smartphones typically involve telecom carriers
rather than VARs, systems integrators and solution providers, and initial
reports on Dell’s move into the smartphone arena say that will also be a key to
Dell’s strategy.

Dell’s reorganization puts Ron Garriques at the head of the new communications
division, moving him from his previous role where he was leading the consumer
division. Garriques joined Dell in 2007 from Motorola to lead what was then a
newly created global consumer division.

Now Dell’s new division that combines the consumer business and the SMB
division will be led by Steve Felice, who currently leads the SMB division.
Before Dell’s previous reorganization almost a year ago, Felice led the
company’s Asia Pacific and Japan

Dell’s most recent reorganization comes at the end of a year when PC and server
sales plummeted as smartphone sales remained one of the only technology
categories on the rise. Gartner’s most recent forecast calls for a 29 percent
year-over-year growth in smartphone sales for 2009 compared with PC sales,
which are forecast to grow just 2.8 percent in unit shipments during 2009 and
see revenues from sales decline by 11 percent. For the third quarter, server
sales fell by 17.1 percent year over year, according to Gartner.

It’s no wonder that Dell and other PC and server makers are eyeing the smartphone
market. But those vendors may find challenges ahead because while their
manufacturing expertise may very well be in computing hardware devices, there’s
still a lot to learn in the smartphone sales model.

Gartner says that it doesn’t expect the share of any single PC vendor to rise
above 2 percent in the smartphone market during the next three years.

“PC vendors should realize that while convergence of technologies offers an
opportunity to enter into the smartphone arena, the business models, go to
market and positioning of products is very different from the PC market,” said
Roberta Cozza, principal research analyst at Gartner.

“PC vendors will find it difficult to simply use existing supply chains and
channels to expand their presence in the smartphone market. The smartphone and
notebook markets are governed by different rules when it comes to successfully
marketing and selling products."

At the end of 2008 Dell announced that it would reorganize—dumping its
divisions based on geographies in favor of divisions based around customer end
markets, including government, enterprise, small business and midsized business,
and consumer. The reorganization also led to the elevation
of Greg Davis
, North America channel chief, to
lead the company’s global channel organization.