Five Key Factors Drive Mobile Device Growth

Five Key Factors Drive Mobile Device Growth

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Written By Eric Sandler

By Judy Mottl

August 26, 2008

Greater productivity, faster and efficient communications and data-on-demand are just three factors propelling smartphones into play and prompting mobile infrastructure build-outs in the enterprise. But don’t forget fashion statements and price wars when counting up the real growth drivers in these mobile devices.

According to Gartner Research, worldwide smartphone sales are expected to reach 1.28 billion units this year, an 11 percent hike over 2007’s 1.15 billion devices sold.

Gartner has identified the top five specific trends spurring device evolution and growth:

1. Consolidation and New Competition

New device players, such as Apple and its iPhone, are looking to differentiate themselves in what’s become a crowded playing field. Meanwhile, some big-name vendors, such as Motorola, are facing pressure as market shares decline and design innovation becomes increasingly challenging, according to Gartner. The lower cost of mobile phone reference designs and modules, as well as the appeal of such a large market, will attract more conventional consumer electronics companies to join the market, said the report.

“For now handsets makers are under a lot of pressure to reduce their prices as operators do not want to increase subsidy which is a high cost for them already,” Carolina Milanesi, research director for mobile devices technology, told

The top trend could potentially drive further price wars going forward, said Milanesi, as carriers increase phone subsidies while expanding contract timeframes and increasing services costs to make handsets more price compelling.

2. Vendors Expand Device Ecosystems

Pressure to lower the price of devices will drive some established players to find new sources of revenue from content and service. This trend, according to Gartner, is illustrated by Apple’s efforts with its iTunes store.

The changing market will drive changes in relationships between vendors, operators and content providers, according to Gartner. Applications wanted by enterprises, such as location and navigation features, will increasingly become available directly from device vendors that are integrating features into products.

3. Devices Makers Focused On Ease of Use

Increasing device functionality and a need for differentiation will drive simpler user interfaces and device experiences, according to the research firm.

That means device vendors will be improving UI competencies and taking into account how users can move horizontally across applications, rather than just vertically within the software modules.

4. Smartphone as a Lifestyle Statement

Style is a compelling drive as users view devices as not only a fashion statement but also a lifestyle statement. In response vendors will need established platforms to make small changes to casings and colors without impacting costs. Handset makers will begin partnering with non-mobile brands– think electronics, fashion or sports vendors — to increase the lifestyle appeal.

“Sure, doing more with your phone appeals to a segment of the market,” said Milanesi. “But there is a segment though that just wants simplicity and lower cost. Even when looking for performance people are rarely willing to compromise on style,” said the analyst.

5. Platforms Becoming ‘Field-Refreshable’

Gartner said as technologies become part of increasingly expensive devices, vendors are going to have to increase ongoing support, upgrades and enhancement of drives. As users will retain high-end devices longer, platforms will need more life cycle management in the form of upgrades and enhancements.

Some vendors are implementing what Gartner terms “field refreshes” that can be made to support new digital rights management requirements, download bug fixes or new applications, wallpapers or skins to keep devices up-to-date.

“We are seeing smartphones grow as a proportion of the overall market thanks to lowering prices and an increased focus by mobile operators,” Milanesi said. “Consumers like smartphones because open platform mean bigger development communities and a better ease of use.”

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