Smartphone Market Growing Rapidly Despite Major Challenges

Year-to-year growth in the Smartphone market in 2005 will exceed 70%, and will continue to grow robustly for the next several years, reports In-Stat. There is a risk, however, that these devices will be seen by consumers as just very expensive feature phones, the high-tech market research firm says. A major problem is that many users do not download applications that make the devices more useful after they leave the store.

"The market's growth will involve major shifts in share among the OS platforms," says Bill Hughes. "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."

A recent report by In-Stat found the following:

• 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.