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January 25, 2006

Personalization To Drive Smartphone Sales - Analyst

Courtesy of InternetWeek

The use of advanced cellular phones capable of running applications is expected to grow strongly over the next several years, as consumers look for devices that they can personalize to reflect who they are, a market research firm said Tuesday.

Based on the number of operating-system licenses sold, 31.5 million so-called "smartphones" were sold globally in 2005, a 70 percent increase over the 18 million the year before, In-Stat said. The 2005 number accounted for between 8 percent and 15 percent of the total number of mobile phones shipped.

The Symbian OS, which is popular in Europe, was in the largest number of smartphones shipped. Other operating systems considered by In-Stat were the Palm OS, Research In Motion's Blackberry OS, Microsoft's Windows Mobile, Linux and the HipTop OS from Danger Inc.

By 2009, smartphone shipments are expected to increase nearly fourfold to 115 million, In-Stat said.

Smartphones are gaining traction among businesses, which see the devices as enhancing productivity, particularly among sales staff and other remote workers, In-Stat analyst Bill Hughes. IT departments customize the phones for accessing email and corporate documents and forms.

The RIM Blackberrry device is an example of a popular business tool, but smartphone use in general is expected to increase in companies.

On the consumer side, which is the largest market, vanity is expected to open the door to savvy marketing by manufacturers.

"The basic trend I see in mobile phones is wanting the device to become more of a reflection of who you are," Hughes said. "Customizing the phone is very personal and represents who I am. The smartphone offers greater ability at personalization."

In addition, people "have a natural desire to want to have fewer devices," Huhes said, and the smartphone's multiple capabilities can accomplish that.

Nevertheless, manufacturers will need to provide phones with core applications that people want, and sell customers on how downloading software can create the personalization they seek.

Currently, about two thirds of smartphone users have downloaded either zero or one application, Hughes said. Also, any smartphone will have to have solid voice communications, since that remains the number one use of mobile phones, in general.

Among operating-system makers, Symbian has taken the broadest approach, working with handset manufacturers to build phones with applications targeting a specific audience, such as a salesperson or someone working for a police or fire department, Hughes said.

The other OS makers, in general, are more widely known for specific applications: Blackberry for email, Microsoft for Office productivity software and Palm for personal information management, Hughes said. Symbian, therefore, has managed to spread its use among more different groups of people.

Besides studying OS shipments, the In-Stat smartphone report included a Web survey in October of more than 1,000 consumers, including 180 with smartphones.

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