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:
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.