Dell Teams With Baidu to Take on Chinese Consumer Market

The mobile market shuffle continues. Apple (NASDAQ: AAPL ) is extending its
reach into every corner of the world, selling the iPad and iPhone to every man,
woman, child and business-savvy dog on the planet at the same time as it is
suing every company with a similar device to block them from getting to market.
Hewlett-Packard (NYSE: HPQ ) is ducking out of the mobile business entirely one
minute, then hopping back in as fickle consumers flock to its moribund but cheap
TouchPad tablet. Research in Motion (NASDAQ: RIMM ) is clinging to life as its
share of the U.S. market sinks, Google (NASDAQ: GOOG ) bought Motorola (NYSE:
MMI ) as a defensive maneuver, and the world is wondering just when Nokia (NYSE:
NOK ) and Microsoft (NASDAQ: MSFT ) are going to show their collaborative hand.
Its scary out there. Rough seas, stormy skies, you name it. But while the rest
of the industry rages against Apple and the gang in Cupertino, Calif., whips
them back in response, Dell (NASDAQ: DELL ) has struck out on a new venture that
might make it a very real force in the mobile device market. A Tuesday report in
Reuters said the computer company has entered into an agreement to develop both
smartphones and tablets for Baidu (NASDAQ: BIDU ), the search and Web services
company so often called Chinas Google. While Dell has increasingly distanced
itself from the U.S. consumer market it dominated last decade, its now poised to
take on a market thats 900 million consumers strong and growing. Baidu is,
unsurprisingly, pulling a Google by developing its own mobile operating system
in the Android mold. The platform, Baidu Yi, sports its very own app store and
other amenities that Apples iOS devices and Googles Android have made standard
issue in the mobile market during the past three years. Dell in turn is making
new devices specifically for Baidu Yi, including a redesigned version of its
Streak 5, the 5-inch tablet device that just recently was discontinued in the
U.S. Dell wont be the only manufacturer making Baidu Yi devices, but it will be
a flagship of sorts, much in the way that Motorolas Droid line of devices were
for Google when Android first was released. The strength of Baidus brand in
China cant be underestimated. The company controls an 80% share of the countrys
search market. Yet some analysts arent convinced this will be enough to help
either Baidu or Dell in the Chinese market. Technology consultancy RedTech
Advisors managing director Michael Clendenin said, Ultimately in China, (its)
Apples game, still for the iPad and iPhone. Apples numbers are hard to argue.
Its revenue in the region has skyrocketed in recent months, totaling $3.8
billion in the second quarter of 2011, six times that of the same period in
2010. Baidu and Dell also will be taking on Lenovo (PINK: LNVGY ), whose primary
business comes from China, totaling $2.8 billion last quarter. The smartphone
and tablet market in China is comparatively uncrowded, though. And provided it
can undercut Apple on price, Dell stands a great chance of making a place for
itself in the country. This partnership with Baidu might give Dell precisely
what it needs to secure a stronger place in the connected device market than
competitors like Nokia, Google and RIM. As of this writing, Anthony John Agnello
did not own a position in any of the stocks named here. Follow him on Twitter
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