Dell taking another stab at the tablet

Dell showed off a prototype of a 7-inch Android tablet this week at the Oracle Open World conference in San Francisco. While being more tablet-sized than Dell's initial anemic attempt at joining the tablet fray, this new venture still faces some challenges in order to compete.

Dell's first "tablet", the Dell Streak, has been somewhat of an embarrassment--to Dell, to Android, and to tablets in general. The device is more like a smartphone with a thyroid condition, and with a virtually antiquated Android 1.6 it's not even good in that role.

There were a number of things that the Dell Streak got right, and which could have given it a strategic advantage over subsequent Android tablets and helped it compete against the iPad if it weren't for its fatal flaws. The Streak sports front and rear-facing cameras, 3G phone capabilities, and expandable memory via an SD memory card slot--all features that many wish the iPad had.

But, the hopes of the Streak were squashed by its diminutive size, outdated OS, and wireless carrier subsidy sales model. The AT&T subsidized price of US$299 with a two-year contract is not very compelling, and the unlocked price of $549 is more than the cost of the iPad, which is an almost guaranteed recipe for failure.

Dell lost the initiative by blowing it with the Streak, but the impending wave of tablets soon hitting the street might actually help a 7-inch Dell tablet succeed. The RIM 'BlackPad' is rumored to be a 7-inch tablet and expected to be officially unveiled next week. The Samsung Galaxy Tab is a 7-inch Android tablet that will soon launch. It seems that 7-inches is the tablet sweet spot, and the spotlight on tablets combined with the Dell name will help this next-generation Dell tablet succeed unless Dell screws it up.

For one thing, both Dell's Streak and its Android smartphone--the Aero, were launched using an archaic release of the Android operating system. Users want the features and functions of the cutting edge Android OS releases, and they aren't willing to pay top dollar for obsolete devices.

With the new tablet, Dell is rumored to be planning to use Android 2.1. While that would be a definite step in the right direction, it would still be a release behind the Samsung Galaxy Tab which will launch with the current Android 2.2. If Dell really wants to make a splash, it should hold out for Android 3.0--the updated release of the OS designed with tablets in mind.

Dell (as well as Samsung and any other tablet competitors) will also have to work out a better pricing model. The tablet is not a smartphone and it is foolish to commit to a two-year contract with a mandatory data plan for a device that doesn't really need one most of the time. On the other hand, people are used to paying a premium for Apple products, and any device that costs the same or more than the iPad is likely to be perceived as overpriced and not very well received.

Like RIM, Dell has an established and respected reputation with business customers. If it can get things right with this new tablet endeavor, it might actually have a successful tablet this time around.