Palm and Apple keep hopes on smartphones

Palm and Apple keep hopes on smartphones

Smartphones represent a rare segment for optimism in the mobile market at the moment, with Strategy Analytics forecasting 31% growth in 2009. Smartphones are now one of the only two levers the operators have left to pull. Network consolidation and cell site sharing is the other, but smartphones, and specifically exclusivity of devices, have the potential to make the difference.

It comes as new players such as Apple, RIM and Palm, which are ahead in the smartphone category, shape the essential exclusive partnership strategy. Smartphones are known as ARPU generators. Being able to attract and retain customers is a powerful position, as demonstrated by Apple and O2 – two companies that are bucking the downturn with strong financial performance.

Like Apple, it is fascinating to watch the challengers also coming from North America. RIM is now the one seeing half of its sales result from consumers, and subsequently has almost half its workforce involved in applications development. For me, the one to watch is Palm, especially since the appointment of former Apple executive Jon Rubenstein as CEO in 2007. Expect some sparks from him, and the promising signs from Palm’s OS and the Pre look like this manufacturer will be a tough contender in the future.

Nokia’s evolution to embrace smartphones has been equally fascinating. Only last week it reported another set of poor financial results, with profits declining by 66% to £326m. Nokia has historically taken the role of leading innovation and exciting consumers over the possibilities of mobile phones, and the benefits have been felt by operators, retailers, distributors and even small dealers.

Nokia’s declining profits and market power suggest there will be less room for investment if things continue, which should be cause for concern even among some of its rivals. Many companies in the mobile industry could find themselves catching a cold if Nokia continues to sneeze. Those companies will hope that either Nokia will recover, or that challengers will pick up the momentum for smartphones and continue investing.

Written by Mobile Today
Mobile Today


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