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Saturday, May 26, 2007

Differing perceptions of smartphones

I've probably posted on this before, but a discussion over at Forum Oxford made me think it out a bit more carefully. It's about the perennial question of smartphone stats, and how quickly smart OS's will penetrate into the massmarket of phones.

But it's not as simple as that, because of the differences in the ways that "smartness" gets used. The definition and perception of "what is a smartphone" varies greatly, and especially by region of the world:

In the US, a smartphone is a "PDA-style" device bought consciously by people who actually want to do data-type stuff with their preferred applications. Purchasers are usually either in businesses or are IT enthusiasts. Mostly, they use Palm or Windows Mobile, with many calling Blackberries "smartphones" even though they don't really have a fully-open OS. They usally buy a "data plan" from the carrier specifically to use the device. ie, In the US, smartness is for the benefit of the end user.

In Europe, the predominant notion of a smartphone is "a high end Nokia with S60", which is generally bought because it's a Nokia, rather than because it's smart. Most owners of S60 devices, as well as some operator-branded Windows Mobile smartphones, neither know nor care about its capabilities. ie In Europe, smartness is for the benefit of the handset manufacturer, particularly Nokia. This is changing slowly, as in addition, there is a reasonable minority of European enthusiasts & hardcore users who do want to do extra stuff with their phones. European operators are also starting to use smartphones more deliberately as platforms for their own massmarket service portfolios (eg 3)

In Japan, the predominant view of a smartphone is one which has an underlying smart OS, which supports the operator's preferred application stack. DoCoMo uses Linux, Symbian and WM, while KDDI uses a variant of Qualcomm's BREW platform. Generally the OS is not exposed to the end-user in a way which encourages addition of aftermarket apps. In Japan, smartness is for the benefit of the operators

In most of the rest of the world, smartphones are used by a small number of enthusiasts for data applications, but they are also used by many people for purposes of prestige ("I've got an expensive phone"), or simply because commercially-unsuccessful phones get dumped at lower prices on markets that will take them, or perhaps get recycled & refurbed. I've seen all manner of early Symbian phones like 3650s on sale in weird places like market stalls in Mozambique. I suppose you could say that smartness is for the benefit of the retailers.

I'm not really sure about smartphones in China - would be interested to get someone's view on this.

Overall, this means that many smartphone market statistics are pretty meaningless, because people tend to assume that "their" use case of smartphones is universal. I find people in the US, in particular, tend to assume that a smartphone is an evolution of the PDA, and that it's a conscious decision to purchase a SMARTphone as a product to "do stuff". But everywhere else, the majority of consumers people just buy a phone, which "happens to be based on a smart OS". Maybe they subsequently "do stuff" with software that the carrier, or the handset manufacturer has pre-installed, but that's not usually the intention at the point of sale.

I suspect that although the notional number of "smartphones" sold in 2007 will be around 100-120m, the proportion which are bought specifically because they are smart & the user knows they want to do "productive or cool data stuff" will probably be about 25-30% - perhaps 30m or so.

There's also a grey area in smartphones with regard to "what is an OS" and whether to count it in the stats or not. I've already pointed out that "smartphones" in Japan aren't open to the user. Also it is important to realise is that many Linux phones just use Linux deep down in the phone (instead of an RTOS like Nucleus), where it's not really accessible by 3rd party software developers unless specifically invited by the manufacturer. Another problem area is BREW - in some phones it's quite a thin layer like Java, but in other phones (eg KDDI's) it's much deeper and more like a full-featured OS. RIM's OS is another could-be/maybe-not platform.

If you're a smartphone app developer - you really need to make sure you understand that your target addressable market is not homogeneous. You need to drill deeper to understand distribution, openness and usage cases

1 comment:

alex said...

Thanks for this insightful analysis of "smartphones".
Tentatively I would think that Asia incl. China but excluding Japan & Korea are like Europe in this issue.
But I am not familiar enough with these markets to be really sure.