Smartphones, Along with the Rest of Telecom, Struggle


These are tough and interesting times for much of the telecommunications sector. Smartphones, while finding acceptance as an increasingly valuable corporate tool, are by no means immune to the pressure.


At the beginning of the month, Research in Motion retrenched its third-quarter estimates due to the poor economy. The good news, at least relatively speaking, is that the company says it hit the more modest goals. The company had net income of $477.3 million, which actually was $170.2 million more than the year-ago quarter.


Much of the increase was due to the release of Storm. The story notes the device was "met with critical praise" while the iPhone 3G from Apple was not as warmly received. It is significant that non-enterprise users represented 60 percent of the 2.6 million subscribers signed during the quarter. Currently, only 55 percent of subscribers are enterprise users. Those are good numbers for RIM, which is trying to create a bigger profile among consumer.


Apple is not standing still. Reports are surfacing that Apple appears set to sell the iPhone at Wal-Mart. The company didn't comment, but the site said that clerks in five states told Bloomberg that the device will go on sale on December 28. The piece notes that Best Buy, the largest electronics retailer in the country, already offers the iPhone. The piece cites reports that the two versions of the phone will sell for $197 and $297 with a two-year service contract.


Palm, meanwhile, is working to manage expectations. An unnamed spokesperson cites an "extremely tough climate" and says the company will face "continued challenges in the coming months." The RCR Wireless report says that Palm is launching the Nova platform late in the first half of next year. The company's fiscal second quarter ended in November, and the numbers aren't pretty. Revenues were down 39 percent, and smartphone sales down 13 percent from the year-ago quarter. Net losses excluding charges almost doubled analysts' expectations, the story said.


The disastrous economy is not stopping vendors from releasing devices, however. Sprint and T-Mobile USA are planning to offer a phone running the Android operating system by the middle of next year. The phone will be designed along the lines of Samsung's Omnia and Instinct. T-Mobile already offers the G1, the only Android phone currently available.


Ultimately, the joke may be on Apple and Android-and the bloggers and reporters who spent much of 2008 preoccupied with their products. This FierceWireless story says that Consumer Reports taps Samsung's BlackJack II as the best smartphone. It adds that the iPhone and the T-Mobile G1 didn't even crack the top five. The BlackJack II runs on the High Speed Downlink Packet Access (HSDPA) platform. The rest of the top five were the T-Mobile Wing, the Motorola QC9, the T-Mobile Shodow and RIM's Pearl Flip.


There is a lot of bad news here, of course. But there also is some good: Smartphones are suffering losses but not imploding and even seem to be subtly broadening their base.