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.
It’s 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 China’s Google. While Dell has increasingly distanced itself from the U.S. consumer market it dominated last decade, it’s now poised to take on a market that’s 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 Apple’s iOS devices and Google’s 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 won’t be the only manufacturer making Baidu Yi devices, but it will be a flagship of sorts, much in the way that Motorola’s Droid line of devices were for Google when Android first was released.
The strength of Baidu’s brand in China can’t be underestimated. The company controls an 80% share of the country’s search market. Yet some analysts aren’t 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, (it’s) Apple’s game, still for the iPad and iPhone.” Apple’s 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 at @ajohnagnello and become a fan of InvestorPlace on Facebook.
