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| | Interesting Article on Pearl Smartphone
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From the San Francisco Chronicle. I highlighted [bold printing and colored font] what I thought interesting. Reprinted with permission.
This confirms my previous statement that manufacturers are not targeting phone sales by age, rather they are marketing to the professional and non-professional segments of cell phone users.
BLACKBERRY AND BEYOND
With lower prices and more features, new smartphones are dialing up the consumer market
Ryan Kim, Chronicle Staff Writer
For years, smartphones had a look and a price only business users could love and afford. Until now.
In the past five months, manufacturers have rolled out a new breed of smartphones designed specifically for consumers. Sleek, compact and multifunctional, the phones represent a push by manufacturers and telecom carriers to go after the 200 million cell-phone users in the United States.
The thinking is that by luring cell-phone users to move up to smartphones, manufacturers and carriers can then make money selling e-mail, data-use, business software and multimedia functions.
The new wave began with the Motorola Q, which premiered in June through Verizon Wireless. Last month, BlackBerry released the Pearl through T-Mobile, while Nokia rolled out the E62 through Cingular Wireless. This month, T-Mobile is set to release the Dash, made by HTC, and Palm released its Treo 680.
The new phones share much in common. They are slimmer than the earlier generation of smartphones. They are all about $200 or less. They all include consumer-friendly features like cameras and media players yet have the ability to integrate business applications and software.
Analysts say the new breed is expected to expand the smartphone market to many first-time users.
"The smartphone category is going to grow over 60 percent this year and about that well next year with all the activity toward smaller and less-expensive devices," said Todd Kort, principal research analyst at Gartner Inc.. "The market is being driven by fashion more than function. Right now, it's who comes up with (the) coolest-looking device."
Until now, the smartphone has been a business and e-mail tool, mostly for business users. Research in Motion, which has sold more than 5.5 million BlackBerries, has dominated the market, selling more than 3 out of every 5 smartphones.
But manufacturers, including Research in Motion, have encountered difficulties selling to consumers and lower-level professionals, a group some industry observers are calling mobile accomplishers. These difficulties kept the smartphone market from growing beyond about 3 percent of the cell-phone market.
But analysts believe this is about to change because manufacturers are expanding their offerings designed to appeal to consumers. Research firm IDC said last month that shipments of mobile e-mail devices will hit 63 million worldwide by 2010, up from 7.3 million last year.
Ed Colligan, chief executive of Palm, agrees the market is poised to grow. But he said companies like Palm need to create offerings with prices and features that appeal to a broader audience.
"The market we're tying to go after is (the) mobile accomplisher ... which is nine times larger than the professional market," said Colligan, at the launch of the Treo 680 earlier this month. "We think if we can reach them with a friendly tone that appeals to them with applications and brands that appeal to them, they may become more interested in getting a smartphone."
Motorola's Bruce Hawver, vice president of product devices, said one of the biggest keys to unlocking the smartphone market has been to reshape the traditional smartphone body to create a sleek device appealing to the eye.
"The Motorola Q is the first product you can put into your pocket," said Hawver. "We found that's been a big barrier for these devices in the past."
The Q, for example, is just about a half-inch wide, or about half the width of the latest Palm Treo 700 or BlackBerry 8700. The Dash and the Pearl are slightly wider.
Breaking the price barrier has also been a huge hurdle for manufacturers and carriers, which typically subsidize the cost of the smartphones. In the past, some models sold for $400 to $500, beyond reach for most mainstream customers.
"Now at $199, you're getting to the mainstream mobile handset prices where all the volume happens," said Todd Achilles, vice president of sales and marketing at HTC. "With the previous generation, the numbers spoke for themselves. Who wanted a clunky $500 device?"
Carriers are still working on the pricing plans for service on the new smartphones, which some consumers may still consider too expensive. For example some carriers, like T-Mobile, only require a separate data plan to handle e-mail and Web browsing. That costs $20 a month for data service for the Pearl on top of a subscriber's voice plan.
Others, like Verizon Wireless, combine voice minutes and unlimited data use for the Motorola Q into a single price, starting at $79.99 a month.
The evolution of the smartphone has stepped up in recent years. Manufacturers are taking advantage of decreasing component prices and more efficient technology that allows them to cram more features into a smaller space at a lower price.
Research in Motion took three years to develop the Pearl, using information gained from previous models. All that experience is now finally paying off, said Guibert Mark, vice president of corporate marketing at RIM.
"We're seeing the stars align with the Pearl," said Guibert. "This is really a steady progression of a long-standing strategy for us. Our whole company was purpose built for this business."
Even with a slew of new devices, some are still waiting to see if next year will be the boom year for smartphone sales. Neil Strother, research director for mobile devices at NPD, said he's heard plenty of hype in the past about the smartphone breaking out of its business niche.
"The planets seem to be aligning for a wider market for smartphones, but I've been looking at smartphones since 2001 and the market has been fraught with a lot of hype and expectations," said Strother. "Until real people buy it in real volumes it's still a market that's waiting to be expanded."
Nonetheless Strother understands the push by manufacturers and carriers to roll out smartphones. The devices are still more expensive than basic cell phones and usually require data service packages, which can provide steady revenue for carriers even as profits from voice minutes continue to slide.
"It's about getting that next incremental dollar on data," said Strother. "These consumers are the ones that have the need and can afford to pay for it."
It's too early to see how the latest models are doing. None of the companies has announced sales figures for the latest offerings.
Meanwhile, consumers have been barraged by marketing campaigns touting the new phones. For some, the message is getting across.
Jacques Bezuidenhout, a bar and spirits consultant who was checking out a BlackBerry Pearl at a San Francisco T-Mobile store last week, was poised to buy his first smartphone to mange business e-mails. BlackBerry Pearl seemed to be the right fit because of its size and price.
"I'm not interested in the bigger BlackBerries," said Bezuidenhout, a 32-year-old San Francisco resident. "I like to be able to put it into my pocket. The old one's a bit clunky and (a) bit awkward holding it up to your ear."
T-Mobile, which has an exclusive contract to sell the Pearl, has been one of the most aggressive carriers in providing smartphones and keyboard equipped devices.
Mike Hendrick, director of product development at T-Mobile, said his company is responding to its customers, who are pushing for more powerful devices. "We're not focusing on trying to build technology for technology sake," said Hendrick. "Our customers have been telling us they want e-mail, they want instant messaging for keeping in touch with their parents or kids. What we're really looking at is filling the needs of our customers so the have devices that can keep them connected."
Last edited by SanFrancisco : 10-24-2006 at 11:44 AM.