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HP Readying Competitor to iPhone, G1

HP Smartphone Versus Android G1 and iPhone
HP is set to become the latest tech giant vying to steal the iPhone's thunder, with plans to soon launch its first-ever, consumer-focused smartphone, InternetNews.com has learned.

Details on the device, which is expected to ship before the end of the year, remain sketchy, however.

Outlets such as the The Wall Street Journal have reported that HP built a new version of its iPAQ product lineup that features a touchscreen, and is based on the Microsoft Windows Mobile 6.1 operating system.

In September, HP (NYSE: HPQ) debuted its first smartphone, a $499, unlocked, 3G HP iPAQ 912 Series Business Messenger. Earlier iPAQ models had included wireless connectivity, but featured a Personal Digital Assistant (PDA) form factor and lacked features typical to today's mainstream smartphones -- such as Web browsing.

While HP told InternetNews.com that it does not comment on unannounced products, one industry analyst confirmed he is being briefed on the smartphone next week.

Several others told InternetNews.com that the product move isn't unexpected, given HP's experience with PDAs -- which to date have mostly been aimed at business users -- and its overall brand strength.

Yet HP's success in the smartphone space may be tied to overcoming some big challenges. The most critical is the news last week that Microsoft is delaying its anticipated mobile OS update, Microsoft Windows Mobile 7. The hurdle could put HP in the same market predicament as Palm, which has suffered due to delays in developing its new propriety platform.

Mobile operating systems have emerged as key elements in bringing the advanced features and functionalities users now expect and demand from smartphone makers.

New arrivals such as the T-Mobile HTC G1, built on the Google-backed Android platform, and the Apple (NASDAQ: AAPL) iPhone, have also set new feature expectations that other handset makers will now forced to follow, said one expert.

"It would not surprise me if HP offered an 'iPhone/Android' wannabe with a touchscreen and media player," Jack Gold, analyst, J.Gold Associates, told InternetNews.com.

Noting that HP has focused on the enterprise market area in the past, Gold said it would not be a big stretch for the vendor to make a smooth consumer move.

"However, I don't see them being terribly successful in the US with a consumer phone if they decided to go that route," Gold said. "There is just too much competition both for the consumer and for the carrier, which is the primary channel for phone distribution here."

HP's push into market at this point in the year is a critical aspect to the growing competition, said another pundit.

"This is traditionally the busiest time of year for new cell phone releases," telecom analyst Jeff Kagan told InternetNews.com. "We have seen many new phones and new ideas be introduced in the last week or two, and we will see more in coming weeks."

Those new phones include the Google (NASDAQ: GOOG) G1 HTC handset, and a new, music-centric Nokia (NYSE: NOK) handset called the 5800 XpressMusic -- which also showcases the new version of its Symbian S60 operating system, with features like Adobe Flash Lite 3 support. BlackBerry maker Research in Motion (NASDAQ: RIMM) is also poised to take a shot at the iPhone and its rivals with its own upcoming touchscreen model, dubbed the BlackBerry Storm 9530. RIM has also unveiled a number of consumer models in recent months more in keeping with its traditional BlackBerry design.

This year has also seen Samsung debuting several high-end devices, including the Soul, F480 and the M800. Likewise, onetime PDA giant Palm is pushing out several new high-end Treo devices.

In light of the growing competition, Kagan doesn't expect to be very impressed with a new HP offering.

"I don't see this phone being very important to the market, with any new features," he said. "But it is important for HP, obviously."

HP's iPAQ 912 Series Business Messenger, which features GPS and HP's Enterprise Mobility Suite of applications on Windows Mobile 6.1 Professional, was the vendor's second smartphone offering in 18 months.

A recent IDC report stated device makers shipped 306 million units during the second quarter of this year -- up 5.6 percent from last quarter and a 15.3 percent increase from the second quarter of 2007.