In-Stat: Smartphone Market Growing Rapidly Despite Major Challenges

In-Stat has issued a new report that finds "year-to-year growth in the Smartphone market in 2005 will exceed 70%, and will continue to grow robustly for the next several years." In-Stat warns "there is a risk, however, that these devices will be seen by consumers as just very expensive feature phones, because "many users do not download applications that make the devices more useful after they leave the store."

Bill Hughes at In-Stat said, "The market’s growth will involve major shifts in share among the OS platforms. The winners will be Microsoft and Linux. Their growth will be at the expense of Research In Motion (RIM) and PalmSource, although these organizations will continue to see their numbers grow."

Key findings include:

• The median number of applications that Smartphone users have downloaded is only one, and the ownership of PDAs, the devices that Smartphones are meant to displace, is twice that for Smartphone users as non-users.
• Consumers, as well as the industry, still lack a clear definition of “Smartphone.”
• Many wireless organizations are wary of Microsoft’s intentions with Windows Mobile. Microsoft is working to overcome the reluctance by the wireless industry by integrating the delivery of content to Windows Mobile-based Smartphones with its server software.

This brings up some more good points about the problems affecting the "smartphone" segment. As posted yesterday about Cingular's definiton that the Treo is not a smartphone, the analysts and industry are confusing matters about what constitutes a smartphone. Everyone seems to have their own definition and it doesn't help that Windows Mobile 5 has smartphone AND Pocket PC editions yet both offer phone capabilities. No wonder it's confusing for consumers, and that's if they even care or know enough to even make the distinction.

As for the lack of users downloading applications to make their devices more useful, the manufacturers, software developers and network operators all need to do a better job in this area. If end users don't know what's available to them then how do you expect them to download more apps. You can not assume everyone is a gadget geek, tech savvy, early adopter, who frequent sites such as Smartphone Thoughts, and treocentral, to get the latest information for their device.

The industry can bundle more applications with the handset via preloading on the device, on a memory card and/or a CD as well as make it easier to find applications and services on the network and Internet. If end users can discover what's available for them with little hassle then more applications and services just might be used...