Smartphone Sales Continue To Grow
By Carlo Longino, Mon Jan 31 22:15:00 GMT 2005

A research firm says device manufacturers shipped twice as many smartphones last year as in 2003, though the devices still represent just a drop in the total mobile market.

Researchers Canalys say manufacturers shipped 17.5 million smartphones in 2004, compared to 8.2 million a year earlier, with fourth-quarter shipments for smartphones and featurephones up 101% from the fourth quarter of 2003. Overall, though, smartphones made up just 2.5% of all mobile devices sold in 2004, using last week's numbers from Strategy Analytics on the entire handset market, which brings these stellar growth numbers into a bit clearer light.

In terms of market share, Nokia leads with nearly two-thirds of the market, followed by Fujitsu, Sony Ericsson and palmOne. Canalys makes some sometimes-hazy distinctions between device types, for instance all RIM products are lumped with PDAs. Had its devices been considered smartphones, RIM likely would have been a strong number two, shown a bigger smartphone market, and reduced Nokia's share. Canalys also says Symbian held 82% of the smartphone OS market, and in what the company calls the "overall mobile device market" -- smartphones, featurephones and PDAs -- it took 53% share.

Canalys says Nokia's range of smartphones, from the much-deried, consumer-oriented N-Gage up to the enterprise-focused Communicator line, is behind much of its success, whereas many of its competitors only feature one or two devices that are aimed at the top end of the market. While undoubtedly there's a lot of interest from business users for converged devices -- just look at RIM's numbers for proof of that -- Nokia's sales, as well as those from Fujitsu, would indicate there's interest from general consumers in smartphones as well.

It's hard to tell if the genuine interest is in smartphones per se, but it's more likely that users are interested in devices with a certain level of functionality, and for the time being, most of those are smartphones. But either way, the smartphone distinction isn't one most consumers care about, nor should they have to. But it does indicate carriers and vendors could do a better job selling these devices. Tell an average customer "this is a smartphone", and it won't mean much. But telling them "this phone can do this", whether "this" is play MP3s or videos, or whatever, will resonate with consumers.

No matter how they're sold, it appears having a range of devices on offer that spans the entire market offers vendors a way forward. 2005 should be interesting in this regard; in addition to the already available Nokia devices, the range of Symbian handsets should expand, and a wider array of Windows Mobile devices should appear on the market as well. While on first glance the Microsoft mobile OS might appear it's only for corporate types, its reach is broadening. There's already the T-Mobile SDA Music handset, which is specialized for listening to digital music and has won some acclaim, and a number of smaller, more consumer-friendly handsets in addition to Pocket PC behemoths. But perhaps the real question for the year will be if palmOne can deliver any more members to the Treo family.