What will the dominant mobile phone be in 2015?
That’s just one of the questions tackled by ABI Research executives Kevin Burden, vp, mobile devices, and Michael Morgan, senior analyst, mobile devices. “Smartphones are the darlings of mobile devices, said Burden, who added that Linux is on track to enter the smartphone market. “Users are seeking a better mobile Internet experience.”
In the mobile device landscape, laptop and smartphones are the bookends. “In the middle are many different devices trying to steal the marketplace, or eclipse the opportunities of the smartphone, including netbooks, portable media players, smartbooks,” said Michael Morgan, senior analyst, mobile devices. “In my 10 years of covering this, I’ve never seen so many devices. But when you look at smartphones, you have to have a holistic view of all these mobile devices. Smartphones aren’t immune to the success of some of these other devices.”
A quick history of the smartphone: “They’ve been around for a decade,” said Morgan. “The original smartphones were the convergence of the PDA and the mobile phone.” In comparison, today’s smartphones are well integrated and highly functional, with GPS/Bluetooth, Wifi and on 2G/3G and sometimes 4G networks. “They’re extremely complex,” said Burden. “We’re past the trend of scaling down in the form factor; we’re more comfortable with PDA-sized phones.”
Despite the fact that smartphones have been around for a decade, there is still confusion about what a smartphone is. “What do we mean by ‘smart’,” asked Morgan. “There are many basic phones that have touchscreens or QWERTY keyboards that are elements of smart. Smart phones are not defined by optional devices: they’re distinguished by their highly functional and customizable experiences.”
He continued describing the definition of a smartphone: “It has to be used as a primary phone, matching telephony with a high level operating system and the applications of that phone need to be available to the user regardless of access to the wireless network,” he said. “You should still be able to use the apps downloaded to the phone. That’s how we define smartphone. What gets hazy when you look at netbooks, a low-end laptop. Smartbooks was the original idea of the netbook–to be always connected to the wireless network via a mini-laptop form factor. What we ended up getting was the netbook form factor. If we look at the smartbook, it’s not that different from a smartphone.”
Although smartphones get all the love (and the press), they still only represent a small portion of the industry: approximately 16 percent of global mobile phone sales last year. In 2015, reported Morgan and Burden, that number will rise to more than 30 percent of the overall mobile handset volume. “This could seem like a conservative number given how the numbers have been accelerating, but there are a variety of issues at play,” said Burden. “Those issues range from how demographics of users break down in various regions to technology issues. In many emerging markets, the number could be 50 percent by 2015.”
Nokia is still the world leader in phones and smart phones, followed by RIM and Apple. Nokia’s impressive numbers in the mobile market must be seen in context of the global economy. “The new customers are coming from emerging markets who can’t afford a $500 device,” said Morgan. “For the lower priced phone, you need scale and this is Nokia’s strength.They will retain and potentially grow market share going forward.” The two also predicted that “the iPhone has a great opportunity to reach into the business segment.” “With their laptops and Apple stores, a small business might go there for a complete business solution,” said Burden.
The most prevalent operating systems among mobile phones is, similarly Nokia’s Symbian, despite all the press that Android has been getting. “Symbian is the largest OS and it has a good play and may be more important going forward than mindshare would dictate today,” said Burden. “In its current form, even in its open source form, it doesn’t meet the expectations of how a smartphone should look and act. But we have to be cognizant of the volume that Nokia represents. When we say one day every phone will be a smart phone, we have to look at individual vendors and how their portfolios permit that. Nokia could do that; they could push Symbian downstream and keep it as a player int this market. But this is pure speculation. It’s just important to note that Symbian is not an OS we can count out, even if it doesn’t match expectations. It can’t be ignored.”
Android also gets a huge amount of attention, but Burden and Morgan pointed out that it isn’t the only Linux-based OS out there. Others include webOS (Palm, which was just acquired by HP), MeeGo (Nokia/Intel), LIMO, and China Mobile. According to ABI Research, Android currently accounts for 41 percent of the Linux phone market, and is gaining ground rapidly.
What is the primary factor driving sales? “At this point, it’s becoming the platform, the marrying of hardware to an OS and the OS’s ability to develop mindshare through ecosystems or even marketing,” said Burden. “Two key winners of that is Apple’s iOS and Android. They’re high tech devices with an OS that allow developers to create many apps. To understand everything about a smartphone can be overwhelming [to consumers], and the key driver can be apps. People want a phone that works and does everything they want to do well. They don’t buy it for the 12-megapixel camera: they want email, to call their friends, and to download apps. ”
What will be the dominant handset in 2015? Morgan and Burden declined to specify a particular handset. “The mobile device market has always been a multiple device market,” they said. “No one form factor will suit the needs of everyone. There are certain form factors that will be considered cutting edge, but in no way will all devices move towards a standard shape.”
Tags: ABI Research, Android, China Mobile, dominant handset in 2015, iOS, LIMO, Linux, MeeGo, mobile operating systems, netbooks, PDA-sized phones, portable media players, smartbooks, smartphones, Symbian, webOS