For Smartphones, Good Days Are Here -- With Better Days to Come

Carl Weinschenk

It's good to be in the smartphone business, according to a couple of studies released during the past two weeks.


Last week, In-Stat published research that said sales of smartphones will increase at a 30 percent compound annual growth rate during the next five years. The overall phone market is growing in single digits, so the percentage controlled by smartphones will grow over that period.


The release also says that more smartphones than laptops will be sold. In-Stat says all smartphone operating systems except the Palm OS will grow at double-digit rates during the next half-decade. The piece also says travelers generate twice the average revenue per user than typical users of less-powerful feature phones and that the lion's share of growth will be as a laptop replacements and as a tool to "help manufacturers develop feature phones."


More good news for cell phone vendors, service providers and application developers was delivered this week by the NPD Group. The company, in this in this New York Times piece, said that 38 million mobile phones -- traditional as well as smart -- were sold during the third quarter. That's 16 percent more than the previous quarter, which is traditionally slow. Smartphone sales increased from 4 percent of the total to 11 percent between the third quarters of 2006 and 2007.


NPD also says that more intelligence is finding its way onto phones. For instance, during the third quarter, 72 percent of phones had Bluetooth capability compared with 44 percent in the third quarter the year before. In terms of market share, Motorola led with 31 percent, LG had 17 percent, Samsung 16 percent, Nokia 11 percent and Sanyo 4 percent.


Some of the more common smartphones are highlighted in this Associated Press piece on The piece calls the iPhone "fantastic" despite "a number of shortcomings." The Palm Centro has many of the features that the Treo -- also from Palm -- offers, but for less. The Motorola Moto Q Music uses the Windows Mobile 6 OS and runs on a fast network. AT&T has a similar phone without the music interface. The Nokia N95 is a European luxury phone with a 2.8-inch screen. Touch by HTC has a user interface that is similar to the iPhone. The T-Mobile Shadow has a "relatively friendly" interface but can be sluggish. The LG Voyager has an iPhone-like user interface that folds away to offer a second screen and a full keyboard. Finally, the BlackBerry Pearl is a Research in Motion device aimed at consumers. The company traditionally aimed at the business market.


The icing on the cake for the smartphone sector is that the good results noted by NPD and In-Stat came in an era in which performance of the mobile Internet generally has been panned. The industry appears to be the precipice of great growth. This month, Google released Android, a platform that will push developers. In January, the Federal Communications Commission will begin auctioning off spectrum in the 700 MHz band, which will further fuel growth.


The result may be smartphones along the lines of the Magitti smartphone software from the Palo Alto Research Center . The software, described in this MIT Technology Review piece, uses artificial intelligence to learn about the users -- his or her habits, and even information found in the owner's messaging -- to act as a personal assistant. The story describes how Magitti can actively interact with the owner to make suggestions and otherwise provide help.

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