Nalini Muppala

Analysis, observations, perspectives on mobile space

Smartphone Ecosystem (Part 10): Beyond Smartphones – High End

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Retailers such as Target have recently started accepting coupons from smartphones. However, in much of the Western world one still has to make in-store electronic payments with a plastic card. Consumers in advanced mobile markets such as Japan and South Korea routinely pay using their phones.

Such a proposition immediately raises questions about security. Companies such as Infineon and ARM have solutions to make these transactions secure at the hardware level. Mobile banking is prevalent in poor countries that are not blanketed with banking institutions. Security can be further enhanced with fingerprint technology. Fingerprint-reading technology is mature enough that it can be added to a phone at a nominal cost.

Adding near field communication (NFC) capabilities to a phone would make it much more useful for making mobile payments. Device makers can add this at a minimal cost, but the infrastructure to accept and process mobile payments is not in place. Adding to the inertia is the vested interest of credit card companies that might then have to give a cut of their service charges to wireless carriers. But wouldn’t it be nice to have one bill for all the purchases that one makes?

Further, a phone with NFC capability could double as a key for cars or maybe even doors. Employees carrying access cards around their necks and on their belts would surely appreciate it.

NFC is just one example. As the convergence movement continues, the hope is that such features will find their way into our phones, making them ever more useful. But this comes at the risk of making us ever more dependent on this device.

There is a sizable section of the computer user base that uses the device purely as a means to consume media and communicate; they create very little on their phones. Even a reasonably configured desktop or a laptop computer has much more power than is necessary for such tasks. At the same time, a phone has evolved from being simply a voice communication device. Just to cite a few use cases, these days a phone as a converged device can double up as a camera (still picture and video), remote controller, media player, personal navigation device, and even e-book reader. However, the small form factor of a phone places restrictions on the user experience.

This gap between a laptop computer and a smartphone has been obvious for a while. Various players have introduced devices in various form factors to fill the gap. Netbooks, smartbooks, and mobile Internet devices (MIDs) all fit this bill. Apple of course wants to redefine this segment with the recently released iPad tablet. As it did while announcing the iPhone, Apple calls the release of iPad a revolutionary moment in computing history. It might well be. What the iPad does best is to serve consumers’ needs for consumption (media), communication (VoIP, social media), and entertainment (games, media).

Devices such as the iPad and the many clones that are sure to soon follow it use technologies similar to what is used in a smartphone – baseband, WLAN, GPS, Bluetooth, touch screen, application processor, and so forth. Since this is a newly invigorated category of devices and people will pay premium prices at least for a while, pricing pressure is not imminent. This class of devices can then bear the cost of innovation and advance the movement for cheaper smartphones.

In the next and final post, we will see why all this fervor around smartphones needs to be taken with a grain of salt.

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Written by Nalini Kumar Muppala

April 17, 2010 at 9:00 pm

Posted in Smartphone

Tagged with , , , , , , ,

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