Despite rapid success in handheld computing, Dell doesn't see a large opportunity in that market over the short term and will continue to focus the majority of its efforts on the servers, storage and networking markets.
Speaking at MIT's Emerging Technologies Conference, Dell chairman, Michael Dell, said he did not expect the market for PDAs to grow significantly over the short term.
"The PDA market is a small in more ways than one," Dell said. "We entered the market just a few quarters ago and got 37 per cent of it that fast. It is not a huge market and it won't have the focus for us of, say, the storage market. It has a long way to go before it is a super high volume market."
Dell said nobody had figured out the right hybrid device that sat between a PDA and a smart phone, and there probably wasn't any burning market need to do so.
"We are not there yet in terms of getting such a product right, but I don't think it will come down to just one device," he said. "You will always have different users with different needs so there will continue to be a variety of devices. You need to converge data but you do not need to converge devices."
During an onstage interview about innovation, Dell said his company's greatest innovation was its business model, which includes its ability to bring suppliers into its Web-based supply chain almost immediately, allowing the company to turn over its inventories 100 times a year.
"Innovation can manifest itself in many different ways, including technology, processes, manufacturing, supply chains, distribution, and logistics," Dell said. "Inventing things should not be confused with innovation. If you can make users money then at Dell you are an innovator."
However, he said that his company still aggressively pursued technological innovation, investing $US500 million a year in research and development. It currently held 1000 patents.
"But our job is not to reinvent things Microsoft or IBM have done," Dell said. "Our job is to find out what users' requirements are. And because we have several ways of working with them directly through our business model, we have a pretty good hold on the pulse of what they need."