Tuesday, November 27, 2007

Buy a smartphone or a computer? Hmm

In-Stat reports that sales of OS-based smartphones will grow at more than 30% CAGR for the next five years, taking increasing market share from their dumber counterparts. The unit volume for smartphones already exceeds unit sales for laptops. In-Stat predicts that smartphone use will grow mainly from their use as a laptop replacement. This is understandable, since they’re basically scaled-down, under-powered laptops with a phone attached.

U.S. carriers have long subsidized handset prices in order to lock you into two-year exclusive contracts with punitive bail-out pricing. Remove that subsidy and the price differential between a Blackberry and a cost-effective but capable laptop practically disappears. If you could just turn off the RF portion and flip out a usable keyboard, smartphones could completely replace laptops for road warriors on plane flights. Or am I the only one who manages to sit behind the guy who reclines his seat practically back into my lap?

Smaller laptops could fight back by adding cellular capabilities, maybe tossing in a Bluetooth headset to make calling easier. But that would give major heartburn to the carriers, whose business plans require you to buy a phone. Also, phone calls aside, while the fastest data network at the moment—Verizon’s EV-DO—can theoretically give you 2.4 Mbit/s downloads, in my experience that requires a hurricane-force tailwind. My laptop’s EV-DO data card is a nice backup when I’m out of range of a Wi-Fi connection, but the slowdown is still painful. My primary business phone is a laptop-based ‘softphone’ from Vonage that works over a Wi-Fi link, which over a cable modem at home delivers a reliable 5 Mbit/s. When I’m not in the office, incoming calls roll over to my smartphone.

So while the growth rate for smartphones is impressive, they leave a lot to be desired as laptop replacements. Still, if you feel you just have to respond right away to an email from your boss that arrived while you were out to dinner, your Crackberry addiction will continue to keep smartphone sales at an all-time high.

1 comment:

Lou said...

I tend to agree. I used a Treo for a while, but the sound quality was horrid and the damn thing kept locking up. I would like an iPhone but refuse to leave my current carrier because their customer service is exemplary. I find for traveling that a Palm TX with a Bluetooth link to my RaZR does everything i would want a Blackberry for without the additional cost. And both link seamlessly to my Mac.

Blackberries are fine when you got a corporation paying for them, but they are not cost effective for small business. And the plethora of non-interactive operating systems creates technologic limitations that are unacceptable.