Smartphones, or phones that enable web access and email, are heading for the mass market.
Palm's new $99.99 (£48.99) Centro, the sleeker, hipper update to the business-centric Treo, is the latest example of a phone that provides all the data-centric features of a business device with the price tag and design of a consumer phone.
"What we've known as the smartphone market is quickly becoming just the cell-phone market," said Iain Gillott, founder of iGillottResearch. "These phones used to cost $500 and $600. Some still do, but we're seeing more and more of them come down in price and targeted for consumers."
Traditionally, in the US, the smartphone market has been dominated by RIM's BlackBerry devices and Palm's Treo line of phones. Initially, these devices were thought of as corporate productivity tools allowing people to send and receive corporate email.
While the corporate market is humming along quite nicely, carriers and mobile-phone makers also see huge potential in the mass market, where, for example, teenagers and hard-pressed mums, who want email access and web surfing on the go, could benefit from smartphones. Of the 213 million mobile phones operating in the US today, only about four percent of them are smartphones, according to market research firm M:Metrics.
But experts say there is a clear indication that people are hungry for more advanced devices. According to M:Metrics, the rate at which people have been buying smartphones is increasing rapidly. Today there are roughly nine million smartphone users in the US. That figure has almost tripled in the past two years.
Some email and web surfing can be done on feature-based phones like Motorola's popular Razr. But the experience is often clunky. Still, consumers generally don't like the bulk and design of the traditional smartphones. And, of course, price is a major factor, as most smartphones are expensive, whereas many feature-based phones are practically given away by carriers.
"Carriers and manufacturers recognise that smartphone owners spend more money on services by browsing the web and watching mobile video," said Mark Donovan, chief market senior analyst for M:Metrics. "But the challenge has been to design a device that appeals to this market and also hits an affordable price point."
As a result, smartphones are evolving to address this market. These "lifestyle" devices not only offer business applications for the corporate set, but they also offer features that are common on standard mobile phones, such as easy access to web-based messaging tools, music players and cameras.
Apple takes a bite of the market
Over the past 18 months, almost every major mobile-phone manufacturer has come out with a product to address this market. RIM introduced the BlackBerry Pearl, a slimmer version of its BlackBerry device with an abbreviated Qwerty keyboard for typing, Motorola came out with the Q, and Samsung introduced the BlackJack.
Then along came Apple, which essentially redefined the market with its sleekly designed iPhone that combines the functionality of an iPod music player with a phone and portable web-browsing device that allows people to surf the net on their mobile device just like they would on their PC at home. While other smartphones allow people to surf the web with full browsers, Apple took the mobile web-surfing interface to a new level.
But, up to this point, price has been a major barrier to truly penetrating the consumer market. Most consumer-oriented smartphones have still been initially priced above $300. The iPhone retailed initially for $500 and $600. Prices are starting to come down, but experts say the hefty price tag of these devices has prevented them from reaching the mass market.
The Centro is Palm's attempt to reach this consumer market with a smaller device that is more attractively priced. At $100, the phone, which will initially be sold exclusively through Sprint's network, bears a price tag that...
