Who will outsmart the smartphone?

We can’t say they didn’t warn us. Analysts have been predicting the rise of the smartphone for, what seems like years, and it is finally starting to come to fruition. This past week HP bought up the pioneer of the PDA, Palm, followed by the collaboration of Windows mobile software and cell phone giant Nokia. The latter was said to be a strategic move to break the dominance of Research In Motion who, by the way, just launched new phones and a new operating system at a wireless conference in Florida. This is of course, to compete with emerging tech titans Apple and Google, who are taking the market by storm with their iPhone and Android operating systems, respectfully. With all of this going on, Acer announcing its plans to enter the smartphone market was practically insignificant. Meanwhile, for companies that hesitated to jump on the bandwagon early (Sony Ericsson, Samsung, LG, etc.) the future is grim, but for those with a foothold, the market’s their oyster. So what does this all mean? Who has the potential to become the smartphone super power? The possibilities may surprise you.

tungstenw largeThe smartphone market isn’t for the faint hearted. This time last year, Palm had launched the much-anticipated Pre, with intentions of taking a piece out of the iPhone. Initial responses indicated that the Pre was a success, and with approximately 800,000 phones sold in Q1, it looked as though the brand may have potential. Hype died down though, sales dwindled, and in less than a year the company stock price had hit a 52-week high of $18.03 (October ’09) and had bottomed out at $3.65 (April ’10), followed by their buy-out last week by Hewlett-Packard. So why did HP acquire Palm if they were in such dire straights? Well first of all, HP wanted to ramp up their smartphone sales (yes, HP has smart phones), which sold a mere 100,000 units last year – practically nothing when you consider there are 45 million smartphone owners in the U.S. alone. HP made this move for Palm’s OS, however, I don’t foresee the collaboration of two duds making much more of an impact than their combined sales.

Alright, so HP is out of the equation, but what about Nokia. Nokia is top selling cell phone company in the world and they’re teaming up with Microsoft. Despite their clout, I’m not sure if they have what it takes to conquer the market. Personally I see Nokia as the General Motors of the mobile industry, and Microsoft as Crysler – just because they’re collaborating doesn’t mean they’ll produce a high quality product. In fact it may make the product worse, although, that’s not necessarily a bad thing. After all, in every market there is always a low cost, low quality product that caters to the layperson. Both Nokia and Microsoft have built their empires on this premise, and have done quite well in their respective industries. Nevertheless, as design becomes a top priority universally – whether it’s phones, computers, or cars – even the low end products must be aesthetically appealing.

Which brings me to the big three, Apple, RIM, and Google. Initially, RIM established itself on the basis of functionality, security, and professionalism; Apple focused on design and special features; and, Google had a little bit of both. However, over the years, all three companies have learned from each other, which is why RIM is redesigning its product line, the iPhone has increased its size and business functions, and Google continues to fine tune all of the above. Despite being tech power houses and the current ringleaders, that doesn’t mean the market is completely impenetrable to new entrants. For example, what if Facebook stepped into the ring? With 400 million registered users, who login on a regular basis, it would be like fishing with dynamite. Of course, they would still need to create a legitimate product and establish a reputation with consumers, but by looking at the numbers, and the advertising potential, it’s tough to say they couldn’t make a dramatic impact. Long gone are the days where prominent cell phone companies were just that. Being a multidimensional company is almost imperative in today’s day, and I can’t think of a company with a larger, more loyal consumer base.

Maybe I’ve been “Liking” too many things from Facebook these days, but with their recent moves to transform the way we use the internet, who’s to say they can’t make an impact in the smartphone market? I guess what the question boils down to is “to like or not to like?”

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2 Responses to “Who will outsmart the smartphone?”

  1. HP was really touting their Slate PC. It was supposed to run Window 7. And then the iPad came out and I think they probably played with one and went “oh”. I expect the HP Slate to be reborn later this year with Palm’s WebOS.

  2. True that. My favourite tech moment of the last few weeks was all the other ‘iPad’ wannabees (read Slate, BlackPad, etc.) pushing their launches after the iPad came out. It’s like a bunch of kids showing off their tricycles – until the kid with a real bike shows up and they all slink home in shame.

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