Smart Phones as the Next Frontier?
An interesting article from the Wall Street Journal compares the market share and profit share of a few major handheld manufacturers. Surprise surprise- Apple and RIM both have extremely high profit/market share ratios, accounting for 35% of the industry’s profits from just 3% of industry market share.
I’m a big supporter of the school that says statistics can be molded to say whatever you want: It’s fairly obvious that cost does not scale linearly with increase in function- at some point the curve flattens out, mostly when you stop adding hardware features (that require more components) and start adding software features (App Store, anyone?). But I think this is pointing towards a larger trend.
Smart phones, while somewhat of a novelty to the average consumer, are only going to get cheaper and even more functional. Even in my lifetime I’ve seen the explosion of technologies we now consider ubiquitous- USB, DVD, digital cameras- and the smart phone is going to see the same kind of leap forward. It’s already happening, too- phones are increasingly being advertised with full-size keyboards for ease of use as the text message becomes an increasingly important means of communication. Touch screens are becoming more popular as manufacturers scramble to replicate the iPhone’s revolutionary interface (not quite, LG). Some form of web browsing is available on even the cheapest handsets, even if it’s only to download ringtones or screen themes.
With the smart phone revolution comes the question of carrier reliability. AT&T’s shortcomings with their national network have been well publicized, and their failure to implement features like MMS and tethering for the iPhone despite what must have been months of warning from Apple (not to mention all the cash the iPhone has brought to the company) is questionable at best. When smart phones take off, the massive increase in bandwidth load could create havoc for the major networks not equipped to handle anything more than small, inexpensive text messages.
Perhaps the largest barrier to overcome is price, and it remains to be seen whether or not the current expense will manage to come down to the standard plan rates. Currently Verizon’s cheapest voice-only plan runs around $40 per month; add e-mail and nationwide messaging and it more than doubles to $100. For the iPhone the required data package runs $30 while the cheapest voice plan adds another $40. Upgrading the existing infrastructure should bring operating costs down, and plan costs will fall accordingly.
Do you own a smart phone? How long have you had it? Leave a note in the comments.
Technorati Tags: smart phone, apple, blackberry, iphone, RIM, MMS, tethering, ATT, verizon wireless
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