Dell's shutting down its mobile business division. The group which develops mobile phones and other devices such as the Streak tablet, will now be broken up and its products folded into other units, a spokesperson said.
The company decided that mobile business would be best incorporated elsewhere within Dell. A Dell spokesperson said the company is shutting down the mobility group because phones and other devices have "grown to be more than a consumer-focused initiative."
He said folding these products into Dell's other units will better position the company to sell mobile devices to all of its customers.
And with the closure comes casualties. According to a filing with the Securities and Exchange Commission, head of the department Ron Garriques, who originally joined the company in 2007 as part of Michael Dell's effort to turn around the company, announced that he's leaving.
His career at Dell has seen his part of the group release several devices. The most well known is the Streak, which went on sale in the US in August, but was delayed for more than a year. According to the WSJ the department has been losing money at times.
Dell reported revenue of $2.9 billion for its consumer unit for the quarter ending in July, down from $3.2 billion the previous quarter and basically flat from a year earlier.
According to analysts, the tablet could have been the downfall of the division. Anthony Cox, a mobile analyst at Juniper Research, told TechEye: "The availability of the open source mobile operating system in the guise of the Android operating system has opened the doors for consumer electronics players to enter the mobile market, and in the tablets market, Dell was one of the first with the Dell Streak.
"Arguably the device is a hybrid between the smartphone and the tablet and it has seen some success, though the playing field will is becoming increasingly crowded with the Galaxy Tab just launched and the RIM’s PlayBook round due in early 2011."
Mr. Garriques will remain at Dell until late January and he will serve as a consultant until the end of 2011, according to the SEC filing. His severance payment will total $1.4 million and he will be paid more than $6 million for the consulting work.