Touchscreen competition keeps the US smartphone market afloat

In recent days, consumers are being deluged with economy-related terminology and newspeak. There's almost nowhere for them to turn to avoid the onslaught. Every current event is being presented in the context of the economy, which now seems to be providing the backdrop for our everyday life. The other day I saw an ad for "Recession Proof Recipes."

So yes, when market research group NPD released its findings that the US smartphone market is growing, that bad-news backdrop couldn't be avoided even then. NPD said this growth is taking place "despite recession conditions."

Of all handsets sold in the fourth quarter of 2008, 23% were smartphones. In 2007, that figure was only 12%. NPD's Director of Industry Analysis Ross Rubin made a statement Tuesday saying that there is a "new competitive dynamic" among mobile phone carriers that has done wonders in driving this market growth. Betanews spoke with Rubin yesterday in an environment totally devoid of perfunctory economic theorizing, concentrating strictly on this new market dynamic.

This dynamic, in short, is that each of the four major US wireless carriers offers its own signature 3G touchscreen smartphone. AT&T has the iPhone, Verizon has the BlackBerry Storm, T-Mobile has the G1, and Sprint will close out the big four when it gets the Palm Pre later this year. "Each device, at least in this window of time," said Rubin, "represents a unique offering from each OS, and is a one-of-a-kind in its own right."

The iPhone is Apple's only model; the Storm has the dubious honor of being the first touchscreen BlackBerry; the G1, while not unique in form factor for HTC, is the first Android OS phone; and the Pre represents a the renewal of Palm in every extent, from OS to form factor.

Additionally, Rubin pointed out, Verizon's BlackBerry Storm and T-Mobile's G1 were actually the most heavily promoted handsets in the history of the two carriers.

Among the main competitors, however, there's been nothing that advances the cause -- if there still is one -- of Windows Mobile.

"Well, Windows Mobile isn't necessarily providing the cachet here," Rubin commented. "There are a number of unique experiences presented by Windows Mobile licensees which apply their own UI layers to facilitate finger driven gestures, like the Samsung Omnia. But Windows Mobile touch devices really aren't among this competitive class, since they're all capacitive touch, and Windows Mobile still uses resistive touch.

"The key purchase motivators for these devices are Internet access and browsing. All of the flagship phones have strong browsers -- almost all of them are also Webkit-based -- so moving forward, the area of focus in Windows Mobile 6.5 is going to be the browser."

As the prices of smartphones dropped, and continue to do so, their sales increase. Likewise, so does the downloading of applications. Rubin added, "All of those devices entered the market with limited app support. The Storm, for example, requires that standard BlackBerry apps be modified to take advantage of the user interface. The paradox is that many define a smartphone by its ability to run third-party apps, but all of these started out extremely modestly in that department."

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