Analysts: While 3G gadgets thrive, only five mobile 'App Stores' will survive

The small subset of software 'app stores' most likely to survive includes Apple's download site, Google's Android Store, and RIM's new BlackBerry App World, according to recent analysis during a webcast featuring Andy Castonguay, Yankee Group's research director.

But outside of downloadable apps, other big differentiators in the increasingly crowded broadband gadget space will include size of the device, connectivity, keyboard, screen, and user interface.

Software apps and slick phone features will help sell 3G/4G services for US mobile carriers, which are counting on text messaging charges as a "cash cow," according to the analyst.

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Where Sprint has lagged behind AT&T, Verizon Wireless, and T-Mobile on the whole, the underdog is starting to catch up now, first with the Instinct phone and soon with the Palm Pre, noted Berge Ayvazian, chief strategy officer for Yankee. Sprint's 3G connectivity is also "tremendous" in comparison to competitors, contended Castonguay, who claimed the ability to travel by train from New York to Boston while scarcely dropping a call all the while.

Due to the smoothness of Palm's Linux OS and the phone's easy navigability and search functionality, the Pre will supply an even "crisper experience" than Apple's 3G iPhone, the analyst predicted. For its first two quarters of availability, the Pre will be sold exclusively through Sprint.

T-Mobile's Android-based, HTC-made G1 has "sold tremendously," and the G2 -- a "thinner device" with more connectivity -- is slated for launch during the third week in May.

Meanwhile, RIM's BlackBerry Storm, sold only by Verizon Wireless, is pulling "new customers [into] the RIM space," he said. Conversely, the BlackBerry Bold, available strictly through AT&T, is conveying old-time BlackBerry fans into the 3G era.

Nokia's 3G-enabled N97 will be sold by US carriers, too, and new, non-subsidized unlocked versions will be offered for around $600 in forthcoming Nokia stores, he forecast.

At the same time, although Apple hasn't said so yet, third-party partners are pointing to a June launch for an "iPhone 4G," a video-capable gizmo with a 3.2 megapixel cmaera, 32 GB capability, removable battery, standard headphone jack, and a lot of other new niceties, envisioned as standing 4.5 inches tall and weighing in at 4.4 ounces.

A June rollout of the 4G would coincide with the "Worldwide Developer Conference, iPhone 3.0 software, and expiration of AT&T [iPhone 3G] service contracts," according to the two Yankee analysts.

But as Yankee sees it, the name "iPhone 4G" is actually a "bit of a misnomer" -- since to qualify as a 4G device, a gadget needs a 100 Mbps downlink speed, a level the Group believes the future Apple device won't meet.

Also during their talk, however, Ayvazian and Castonguay mentioned the 4G devices now under way from some 80 manufacturers for Clearwire's broadband network, once the deployment moves past Portland, Oregon.

These devices include USB dongle modems from Motorola and some seven other manufacturers; Intel Echo Peak embedded WiMAX modules; Clear Spot Personal Wi-Fi Hotspots; desktop modems; the Samsung Mondi mobile Internet device (MID); and WiMAX-ready netbooks from Acer, Asus, Dell, Fujitsu, Lenovo, Panasonic, Samsung, and Toshiba.

Mobile carriers are now finding that it's actually cost-effective to subsidize netbooks, Castonguay maintained, citing that AT&T already subsidizes netbooks from Acer, LG, and Dell.

But he also hinted that Samsung's Mondi might fare better than either phones or netbooks in the 4G world, due to its combination of a pocketable form factor, a 4.3-inch screen, and the ability to run real applications and documents on Windows Mobile 6.1.

Also in terms of software, although mobile 3G and 4G phones might only get a lot of use out of three or four software applications each, their users might easily download ten times as many or more, Ayvazian suggested. "If they're $1 or they're free, it's really no sweat," Castonguay agreed.

But just posting the apps in an online store won't guarantee success, the webcast viewers were told. "Many of the announced initiatives will fail," according to the analyst. "What makes a successful app store platform? A large base of devices, a vast developer community, [and] similar device specifications."

On the business side, the list of leading mobile device platforms is somewhat different, Ayvazian observed. While Apple is gaining ground, CIOs are looking keenly at Windows Mobile, RIM, and the "robust" Nokia environment, he elaborated.

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