Smartphone market eyes next wave

Victor Liu Zhoujiao
13 Nov 2006

Victor Liu Zhoujiao in a telecoms industry analyst for In-Stat Asia Pacific

As the scope of the digital life broadens, people have increased expectations for their mobile phones. Rather than providing various enhanced functionalities on higher-end feature phones, phone makers increasingly are focusing on smartphones to accommodate demand for an expanding range of multimedia applications as well as devices that can handle multiple tasks on the move.

In-Stat expects sales of smartphones in Asia Pacific to expand 98% this year to 18.8 million units, showing the market is moving from serving a limited pool of technology enthusiasts and businessmen to reaching out for mass adoption. Device makers are taking a number of routes to gain market traction, such as adding new functionality, diversifying their product portfolios, introducing design innovations and forming an eco-system around the major smartphone OS platforms.

New functionality is always a safe strategy and one favored by many. BlackBerry discovered long ago customers' strong desire for real-time email and quickly gained huge acceptance among business customers. The competitive landscape has since shifted with the launch of devices running on Windows Mobile and Symbian with push email capability. QWERTY keyboards are standard in these email-ready devices. To further improve work efficiency, makers are adding everything from a single inbox for unified messaging to name-card scanners to voice-activated functionality.

Expanded range
To woo the mainstream consumer, handset makers are diversifying their portfolios with function-specific models that cater to niche audiences. The Nokia N91, Samsung SGH-i310 and Sony Ericsson W950 are billed as jukebox phones and feature large storage capacities. Balanced between rich multimedia support and essential personal information management, the Motorola A1200 and E680 phones are attracting much attention and selling well. With the rapid expansion of the smartphone range, the top-selling models now must have a distinctive feature to stand out among its peers within the same price range.

Smartphone design has shifted from merely a functional focus to more attention to the form factor. Weight and size reduction is a major trend despite the fact that more functions are being added. Customers are allured by the slim Motorola Q, polished HTC Star Trek and sleek Sony Ericsson M600. The introduction of the slide-out keyboard effectively cut the phone dimension without affecting the screen size on many models, including the HTC Hermes and Nokia N80. With a transparent plastic cover, buyers of the Motorola A1200 are less worried about accidental scratches on the touch screen while keeping information displayed all the time.

Users of smartphones with open OSs have better choices of applications from an increasing number of third-party developers that are gathering around the major OSs. Vendors are able to modularize and accelerate product development on standardized smartphone OS platforms. An increasing number of phone makers, device models, application developers and users of the same smartphone OS are improving the economies of scale. Players such as Nokia (Symbian), Motorola (Linux) and HTC (Windows Mobile), which have taken the lead in their respective OS eco-systems, are benefiting the most from the expanding market. Unpopular smartphone OS platforms and their phone models are facing intensified competition and left with only niche markets.

As In-Stat research suggests, the Asia-Pacific smartphone market is forecast to more than triple to 64.2 million units by 2011. However, OS vendors face various hurdles.

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