Nalini Muppala

Analysis, observations, perspectives on mobile space

Casualties Of The Smartphone Juggernaut-1

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Smartphone shipments continued to grow in the first half of 2009, in spite of contraction in the overall mobile phone market. The handset market is showing signs of polarizing towards smartphones and low-cost phones. Various players in this ecosystem, such as handset makers, wireless semiconductor providers, wireless network operators are adjusting their strategies and plans accordingly.

The ready acceptance of smartphones by consumers means that makers of dedicated devices, whose non-phone functionalities are mimicked in a smartphone, are seeing a negative effect on their products’ sales. Low end and even some mid-range models of cameras, personal navigation devices (PND), personal media players (PMP)  are at the most risk of being marginalized by smartphones.

Companies that make both smartphones and dedicated single purpose devices are seeing a negative effect on their non-phone divisions. During a recent earnings call, Apple said that the popularity of iPhone was weighing down on iPod sales.

Multiple wireless technologies bundled into a smartphone enhance the usability of non-phone features. With Wi-Fi, GPS, Cellular network connectivity, Bluetooth, FM a smartphone can go farther than a standalone device. A few examples: Photos and videos can be geo-tagged and uploaded to a photo/video sharing website. GPS functionality can be enhanced using cellular network signal in places where a satellite lock is tough to obtain (Assisted-GPS). Media playback can be streamed to home entertainment devices, car audio/video system with Bluetooth, FM.

Standalone devices are vying to add connectivity functions to improve functionality. For example, Bluetooth is being added to some digital cameras to aid wireless syncing and printing. It would be prudent not to pit basic use of these devices against a smartphone.

A big advantage for the smartphone is that it is with us most of the time and one need not go looking for another device. Taking a quick picture or shooting a short video with a phone captures a child’s activity better than orchestrating with your SLR or camcorder.

Companies making single purpose products should concentrate more on high end devices whose functionality will not be available on a smartphone anytime soon. Camera makers can bet on SLR models to make them money. PMPs with high storage capacities will be around for a while. PNDs will continue to be used in marine, air travel, tough terrains.

To be sure, the cheap end of these devices will have an uptake for a while as well. Owning a smartphone these days means signing up for a data plan, and this adds to the cost of ownership. As the price  pressures continue, more people sitting on the fence will buy in and add to the smartphone momentum and this convergence trend.

It is then logical to conclude that the upcoming iPod product refresh in September will probably continue to have a high capacity model in addition to the more popular iPod Touch.

With more short range wireless technologies vying for to enter a smartphone in the future, more functionality will be possible. I will revisit this post as such trends gain momentum.

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Written by Nalini Kumar Muppala

August 28, 2009 at 7:22 pm

Posted in Smartphone

Tagged with ,

One Response

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  1. […] a comment » Apple refreshed its iPod line today. As I suspected, iPod Classic – the high capacity model in iPod lineup – continues to live on. It even […]


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