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Smartphones Move Beyond Mobile Niche

Smartphones' premium prices and "supersized" form factors have historically combined with a limited demand for advanced data services to restrict them to "niche market" status. But 2006 will bring a growth spurt in the smartphone market that will see worldwide shipments more than double. The 123 million units that ABI Research forecasts will be shipped this year will give smartphones nearly a 15 percent share of the mobile phone market, according to its recent study.

What will drive the expansion of smartphones beyond the current core market of early adopters? According to Philip Solis, the firm's Senior Analyst, Mobile Wireless Research, five factors lie behind the devices' growing momentum. "Increasing demand for robust data communications applications � especially mobile email and instant messaging � will play a role, particularly as 3G speeds improve the appeal of mobile data services. With increasing sales volumes, prices are falling fast, while the choice of models on offer is growing rapidly (39 percent more models were available in 2005 than in 2004). Even as their functionality expands, smartphones are shrinking in size, offering lower power consumption and longer battery life. Finally, Wi-Fi is reaching into the smartphone, and we expect to see fully a quarter of all models offering embedded Wi-Fi by 2010."

But behind attractive interfaces and powerful applications lie operating systems, and the shifting tides of OS adoption will be at least as important as any other factor in determining the shape of the future market. With the Palm OS moribund, Linux is finding increasing favor, with industry heavyweights such as Motorola, Samsung, NEC and Panasonic among its backers. "The Windows Mobile OS is gaining ground too," notes Solis, "while Symbian, whose OS is currently the hands-down market share winner, is attempting to stave off competitors by halving its license fees for volume deals."

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