Smartphones shoot it out
It's the smartphone Wild West out there, with an OS war, players jockeying for position, mutually-exclusive standards and Apple's domination.
The smartphone market is in the Wild West right now, according to Sue Marek, editor-in-chief at Fierce Markets.
While some observers predict the weakening of operator strength in the face of advancing hardware and big brands such as the iPhone, Marek says market uncertainty does not mean we should underestimate the operators. “They will still dictate things like the operating systems used on handsets, not least in America.”
Marek addressed the recent IFA international press conference in Malta, ahead of the forthcoming IFA technology fair in Berlin in September. During the conference, her fellow panellists debated the future of smartphones and other mobile devices, with some interesting observations on how it's all likely to pan out.
As with so many discussions centring around technology, the only certainties were uncertainty and disagreement.
Former PC World editor and well-known blogger Harry McCracken said “smartphones in 2009 are where PCs were in 1983 in terms of capabilities”. It seems the mobile market is also bearing a striking resemblance to the PC market of two decades ago, with a lot of players jockeying for position and little clarity regarding which products and software will join the likes of Tatung, Sinclair and Sord on the dusty shelves of once-good-now-forgotten technologies.
At the core of action
For McCracken, the only real certainty is that Apple is going to be a strong force. “It's not clear that Microsoft will be a player here, or Nokia for that matter. The iPhone changed the game a lot as it revolved around Apple rather than the carrier network,” he noted, before predicting “we're moving towards dumb terminal mode.”
Predictably enough, someone begged to differ. On McCracken's latter point, Steve Wildstrom, writer and editor of BusinessWeek's personal technology column, "Technology & You", believes Apple made a mistake when it initially assumed the iPod and iPhone would spell the beginning of an era in which everything took place in the browser. “They got it wrong,” he said. “Applications are completely where everything is at. Even if the data resides in clouds, everything still works better in an application than a browser; you can do so much more with the data.”
While it might seem clear Apple enjoys a significant head-start over the competition in this department, Rob Enderle, president and principal analyst of the Enderle Group, reckons the keen eyes should be on Android. “The market is very fragmented and the iPhone has captured a lot of that but people need to watch Android,” he said. “Google really understands the concept of the cloud as a platform. A standard platform across a variety of devices is coming; carriers will become competitors for OEMs.”
Enderle believes the proliferation of mutually-exclusive standards across a variety of technologies is blocking ongoing development across a variety of devices, including smartphones. “Cloud computing could really help here,” he noted.
Marek believes the cloud offers “a storage option” but that carriers haven't figured out their role in that yet. If Enderle's right about Google's intentions, it could be that carriers have their minds made up for them.
If one of the key reasons for the growth of the PC market was the existence of common software standards, the smartphone market is in for a rollercoaster ride at least, with all-out war on the operating system front seemingly inevitable.
“With PCs, it didn't matter whether it was Microsoft or IBM's hardware, the developer community was able to jump in and that's where all the growth took place,” says Creative Strategies president Tim Bajarin. “The smartphone category is still very much in the early stages. We don't have a lone operating system - Android, BlackBerry, Symbian, Microsoft, Apple, Linux are all there, so who are the vendors supposed to back?”
Android has, to date, largely been stymied by the lack of quality hardware - HTC's Android phone was a flop, although Wildstrom says that was largely because the phone itself was “crap”.
The next-gen of Android phones promises to be much better. HTC announced its intention to release at least three Android devices in 2009, with Samsung, Garmin and Sony Ericsson among the others saying they plan to release this year. How the market responds should be revealing.
The operating system issue is going to represent a huge challenge in the coming months and years. But it's not one that's likely to be resolved easily - the problem lying largely in the fact that, in many cases, hardware continues to be streets ahead of the software currently on offer, and the diversity of options is causing something of a disruptive feedback loop for those looking to play catch-up.
For Wildstrom, Linux offers a “rock-solid kernel but the user interfaces are basically afterthoughts”. For this, he points the finger of blame at the developers, who he says: “Simply don't take the UI seriously enough. For them, it's all about the command line.” You only have to look at the upsurge in netbook purchases following the launch of the more familiar Windows XP on them to see that he has a point.
Smart, but not overbearing
Marek, unlike others, does not see a scenario in which smartphones achieve anywhere near 100% penetration - she's calling it at 60%.
Nikkei senior staff writer Waichi Sekiguchi believes the Japanese market has a greater appetite than most for the devices. However, he added: “They don't use PCs that much in Japan. I'm seeing a future in which powerful handheld devices will enjoy massive growth there, allowing users to stream or download videos and other content.”
The operating system issue is going to represent a huge challenge in the coming months and years.Pamela Weaver, ITWeb contributor
EndGadget writer Thomas Ricker believes this is exactly the sort of trend that will drive smartphone growth elsewhere in the world. He pointed out that, as consumers continue to require superior processing power across their devices, smartphones are moving in that direction, driven in no small part by the media and social networking phenomenon for which, he said “smartphones are the device”.
While Japanese users may eschew the PC, Ricker thinks the rest of the world will continue to be different: “You can take pictures or shoot video but you still need to take your data home and do something with it, so the PC or something like it isn't going anywhere as such. Users will still need some processing horsepower sitting in the home; there has to be some kind of hub for all this.”
According to AdMob research, the top five best-selling smartphones globally are: Apple's iPhone, Nokia's N-70, BlackBerry 8300 (curve), Nokia's N-80 and N-73.
Those who feel it's only a question of time before Apple kills off all opposition may be interested to hear that, according to research by NPD Group, BlackBerry's curve was the top-selling smartphone in America during the first quarter of 2009. Cynics may well point to carrier Verizon's “buy one, get one free“ approach that drove sales as an example of the lengths companies need to go to get ahead of Apple, but market share is market share.
Stateside, Apple's operating system is making a swift move towards pole position, with AdMob reckoning its market share at 49.8%, with 33% of global smartphone traffic (the Nokia N-70 claims second place with just 7.1% of the latter).
Research In Motion's share, 20.9%, gets it second place, while Android accounts for 5% in its first three months in the wild (it's also the number one choice on T-Mobile). Since August 2008, Apple has increased its global smartphone operating system share from 4% to 33%, largely at the expense of Symbian, which has slipped from 64% to 43% over the same period. In South Africa, Nokia is still king, holding 37% of the market; Samsung is a close second at 33%.
* The IFA press conference, which took place in Malta in April, was a precursor to the main event: the IFA trade show to be held in Berlin in September. The event regularly debuts the most products worldwide. For more information on IFA, visit www.ifa-berlin.com.