sagging PC business was the primary culprit. The company's Project Ophelia, an out-of-the-box PC concept set to debut this July, won't change that on its own, but it could represent an important shift in the company's thinking.
Though Dell has achieved some tablet-driven success with schools, the company has largely struggled to keep up with the device market's trend toward mobility. Ophelia could signal that the company is finding ways to adapt and, perhaps, to catch up.
Ophelia is a miniature computer that could easily be mistaken for a USB stick. Equipped with two USB ports, Wi-Fi and Bluetooth connectivity, and a dual-core processor, the device plugs into a display's HDMI port, turning compatible screens -- from small desktop monitors to giant HDTVs -- into ad hoc computing devices.
Ophelia runs Android 4.0 but also comes with PocketCloud, which allows users to access files stored on PCs and other devices. It also can facilitate a host of remote desktop opportunities by hooking into virtualization platforms from Citrix, Microsoft and VMware.
[ Get the lowdown on one of Dell's latest tablets. Read Dell Latitude 10-ST2 Windows 8 Pro Tablet: the Good and the Bad. ]
Ophelia was first teased in January at CES, and Dell has continued to tout the product throughout the spring. It will be demonstrated at this week's Citrix Synergy conference in Los Angeles. The first Ophelia shipments in July are earmarked for developers, but general availability should follow by the fall. The device will be able to download apps and movies from Google Play.
Dell became a household name thanks to its built-to-order PC model but has spent the last several years diversifying into an end-to-end software and services company. Computers still dominate the company's revenue streams, however, and Wall Street has been skeptical that Dell, from a financial perspective, is really more than a PC maker.
The dynamic between Dell, its investors, and the PC market is one of the reasons CEO Michael Dell is currently trying to take the company private, a strategy that some influential investors, such as Carl Icahn, continue to oppose. However the buyout drama shakes out, Ophelia still represents a meaningful statement from Dell: the product is a new, mobile-friendly way of thinking about what does and does not represent a computer. If tablets are one slice of the post-PC equation, then technologies such as Ophelia could represent another, albeit smaller, one.
In a March interview, Jeff McNaught, Dell's executive director of marketing for cloud computing, explained that Ophelia grew out of Dell's Wyse acquisition, which provides the foundation for much of the company's virtualization business.
He said that Wyse customers wanted all-in-one thin client endpoints of all sizes, from hand-holdable tablets to large, desktop-oriented monitors. "Building all those different sizes with thin client intelligence would be difficult," he said, but once Wyse was purchased by Dell, the dilemma became part of the impetus for Ophelia. Because the device makes that "intelligence" portable, users can effectively repurpose HDMI-equipped endpoints of any size they want.
A desire to build low-cost devices was another aspect of the product's development, McNaught said, noting that the device, which will sell for $100, is much cheaper than most thin clients currently on the market.
But whereas most thin clients are used within an office, Ophelia allows users to summon a computer almost wherever they need one. An on-the-road traveler whose laptop has died, for example, could plug Ophelia into a monitor in a hotel business center, securely log into her work environment through Ophelia's interface, and, because the virtualized session will terminate as soon as Ophelia is removed, leave no sensitive data behind.
"We realized it could be a secure solution for travelers," McNaught stated, characterizing the device not as a PC replacement but as a new way to extend PC experiences. He said Ophelia will offer IT-friendly management tools, such as remote wipe, through Dell's Cloud Client Manager.
But McNaught believes Ophelia also has recreational appeal that could stretch into the consumer space. For example, he said, a hotel guest normally has to pay $9 to see a movie in his room. With Ophelia, the guest could stream HD video from Netflix or Hulu to the TV, or spend hours playing Android games.
"It has practical applications, and at the other end of the spectrum, it's also whimsical and fun," McNaught said, adding that Dell is going to target Ophelia at enterprises but that it has also fielded interest from educators and consumers.
It remains to be seen whether Ophelia will be a novelty, a flop, a one-off success, or a sign that Dell's acquisitions are starting to innovate. But McNaught feels confident the product reflects the company's growing capabilities.
He praised the device's engineering, specifically the miniaturization required to pack so many computer components into such a small package, and to keep Ophelia's power consumption at a scant two watts. He also praised the device's software, which he described as delivering "automatically-managed, virus-immune" services to both enterprises and consumers.
"When you look at Ophelia, there are really two giant feats," he said.