Smartphones Know Ups And Downs

Microsoft and Linux lead a smartphone market that grew more than 70
percent in 2005. But, according to In-Stat, tempering the good news is word that
consumers aren’t doing much with the phones once they pull them out of the box.

While the smartphone market is expected to grow over the next few
years, the expansion comes at a price for two familiar companies,
according to Bill Hughes, In-Stat analyst.

“The market’s growth will involve major shifts in share among the OS
platforms,” Hughes said in a statement.

Microsoft and Linux will take
the lead as Blackberry maker Research in Motion (RIM) and PalmSource
slow down. And while PalmSource and RIM recede, they will still experience
growth, according to Hughes.

Microsoft leads at a time when the industry could use the
software maker’s ability to sell.

“Right now there isn’t a sales channel
for smartphones,” according to the analyst. Microsoft has been “very
successful at creating an ecosystem for smartphones,” he added.

“Microsoft has taken a lot of effort developing the phone first,”
said JupiterResearch analyst Michael Gartenberg on the software giant’s
smartphone tactics. (JupiterResearch and are owned by Jupitermedia.)

And then there is Palm’s transition to Windows Mobile.

Palm, which once used the PalmOS developed by PalmSource, has adopted
Windows Mobile. Last year, Japanese software developer Access bought PalmSource.

“Palm’s Treo 700 represents the best implementation of Windows
Mobile,” Gartenberg said. Balancing phone and data, the smartphone
“serves both masters well.”

The challenge to this positive growth, however, is a perplexing trend Hughes discovered: a lack of interest in upgrading.

“They look slick, but many people who own them still have other
devices,” Hughes said.

Smartphones are marketed as replacements for your
cell phone and PDA. But Hughes found that smartphone users have twice the number
of cell phones and PDAs than non-smartphone owners do.

Another aspect holding back smartphone adoption is the lack of interest in enhancing the smartphones. On average, consumers download only one new application even though the devices can handle many more.

The Windows platform could make it easier to increase the number of
smartphone applications downloaded, according to Hughes. Another step:
more companies offering employees smartphone applications. Currently,
companies have expressed only a “lukewarm response” to such a measure,
Hughes said.

Both consumers and the industry are unable to settle on a definition for a smartphone, he added. The Treo, which has both
data and phone, is alternately described as a smartphone and a handset,
according to which carrier you ask.

RIM, also hurt by Microsoft’s ascension in the smartphone market, has
been successful because it limited the device to data-only. “Less can
often be more,” Gartenberg said.

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