The Summer of the Superphone

Last September, on the eve of our first Mobilize conference, John SanGiovanni, co-founder and VP of product design at Zumobi, talked to us about the coming era of the superphone. Eschewing the smartphone moniker, SanGiovanni noted how this new class of handsets — led by none other than the iPhone (s aapl) — was starting to become part of our everyday lives.

With vastly better performance, desktop-grade web browsing, and high-resolution displays, a new category is born. I call them “superphones,” and they are achieving tremendous traction with consumers and professionals alike…the next wave of true superphones promises to back up a device’s good looks with deeper platform technologies and more robust back-end services.

Fast-forward to today, and we are standing on the cusp of what will be the summer of the superphone. (For what makes a superphone, please refer to the accompanying table.) Here are some of the devices you can expect to see over the coming months:

  • Palm (s palm) has launched its much-awaited Pre device on the Sprint (s s) network. The device has received a big thumbs-up from all the major consumer gadget critics, including the very influential Engadget and Gizmodo blogs. But while the reviews are ensuring a strong launch for the device, if you’re looking to get your hands on one, don’t get your hopes up — so far they’re in short supply. (You can read my review here.)
  • Nokia will start selling its impressive Nokia N97 device, which is expected to do quite well in the overseas markets. Nokia is going to launch unlocked versions of the N97 later this month in the U.S., where it will be optimized for U.S. 3G networks. I’m not clear if it will work on T-Mobile 3G, but it looks like AT&T customers can use it on their wannabe 3G network.
  • HTC is going to introduce its new Google (s goog) Android-based handset, the keyboard-less and touch-only Ion Phone. I’ve been using a review version of it for a few days now, and I absolutely love it (though I’m not giving up my BlackBerry 8900 just yet!) I think it’s one of the strongest touch-based competitors to the iPhone, even if it doesn’t have that many applications and the Android user interface isn’t as impressive as the iPhone UI. Google is expecting more than a dozen Android phones to hit the market in 2009.
  • Apple is likely to announce either a cheaper iPhone model or a new iPhone model (or both) next week at its WWDC Conference in San Francisco. It’s also likely to make the new iPhone 3.0 OS available at the same time.
  • RIM (s rimm) is expected to launch a slew of new BlackBerry devices.

What Makes a Superphone?


  • Display with at least 320 pixels on the short axis
  • 3G connectivity or greater (plus additional radios as appropriate…Bluetooth, Wi-Fi, etc.)
  • Location-sensing technology (GPS, high-resolution signal-strength-based location, or equivalent)
  • Hardware-accelerated graphics subsystem


  • Integrated web browser that supports current desktop development standards
  • Published native developer SDK that allows programmatic access to the specialized hardware/software features listed above.


  • Integrated process for certification and searchable catalog distribution of third-party applications. (App Store)

From the GigaOM Archives »

These launches come as growth in the overall mobile market is starting to slow — drastically. According to Brian Modoff, an analyst with Deutsche Bank Securities, the increased demand in the first quarter and start of the second lulled people into thinking that the mobile market was back on track. Retailers and carriers restocked. Oops!

In our handset model, we are currently modeling 6% sequential growth, and our sense is that the Street is expecting somewhere in the range of 5% to 7% growth. However, we are seeing increasingly seeing signs that this may be too much to expect. The first dissenting note came from Nokia who on their earnings call said they expect flat to 2% growth. Since then other contacts have told us that a flat or modestly up quarter may be what we should expect, as one of our contacts put it, “Our order improvement is done.”…As we have noted in past reports, there is a difference between not getting worse and actually getting better. We think the industry inventory levels may have reached their new steady state, better than 4Q08 but still well below historic levels. (From DBS research report, dated May 31, 2009.)

In the superphone business, there are none as dominant as Apple and RIM. Their dominance is one of the reasons why they’re able to make a lot more money than their rivals — despite selling many fewer handsets.

As the iPhone entered the market and RIM entered the consumer sphere the profits of the rest of the vendors has declined dramatically. Looked at another way, Apple and RIM each claim a greater share of profits than any vendor except for Nokia and Samsung. (From DBS research report, dated May 31, 2009.)


That said, there is a lot of interest in Palm’s Pre. Same goes for Nokia’s N97. Will that be enough? Or will the iPhone/BlackBerry juggernaut continue to suck the oxygen out of the handset business and ensure that Apple and RIM keep their stranglehold on the superphone business? My bet is on the latter!

PS: If nothing else, the SuperPhones has created a demand for mobile apps, The New York Times says. Increased M&A of these mobile apps is up next, the Times says.