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Smartphones: Is image really everything?

If you want to conquer the smartphone market there's a clear recipe to follow. Be smart, add a lot of hip and cool and stir in productivity.

If you want to conquer the smartphone market there's a clear recipe to follow. Be smart, add a lot of hip and cool and stir in productivity. Bake in some marketing buzz and you can hold pricing and become a signature smartphone.

That's the big takeaway from a report from Interpret LLC. The report, highlighted by Engadget and others, has been used as a data point in the revival of Palm. For instance, Palm rose off of its deathbed with the Pre and now is second in mindshare to the iPhone.

But if you've noticed Palm's latest quarter and lumpy outlook you'll find mindshare isn't exactly everything. Price points, margins and sheer volume matter. Palm is a player courtesy of the Pre, but it remains to see if it can keep the hits coming. Nevertheless, it's worth addressing the mindshare issue since it clearly saved Palm, which has been able to raise capital.

If you buy into Interpret's findings it's clear that smartphones are increasingly becoming fashion phones. The big question---left unaddressed by the report---is how long a mindshare edge can last. The question is huge when you consider that Palm may be a 2009 story, but there are no guarantees for 2010. Meanwhile, Motorola may be poised to be the mindshare gainer in 2010.

Interpret states in its report:

Consumers intending to purchase a smartphone no longer feel that the iPhone is the only player in the smartphone market. When it comes to how much they are willing to pay and what key associations they attach to smartphones, consumers are exploring all of their options. However, they see a smartphone’s ability to be smart (53%), hip/cool (48%), and productive (44%) as the key barriers to entry.

The definition of smart revolves around doing multiple things---audio, GPS, camera etc. If smart is combined with hip and productive, vendors can maintain price points.

Here's where the signature smartphone brands stand:

My conclusion: The mindshare game is a notable point, but what happens when every phone becomes smart, cool and productive? Answer: You're right back to the commodity phone business.