Smartphones to outsell handhelds this year

A new study projects that smartphones - spurred by new devices from Orange and Sony Ericsson--are finally about to become a mass-market phenomenon.
Written by Matthew Broersma, Contributor
UNITED KINGDOM--Smartphones -- or mobile phones that double as handheld computers -- are expected to sell better than stand-alone handhelds for the first time this year, according to a new study.

U.K.-based Canalys projects 2003 sales of 3.3 million in Europe, the Middle East and Africa for smartphones, including devices such as Orange's SPV and Sony Ericsson's P800. That compares to 2.8 million handheld sales for the year, according to the analyst firm.

The figures suggest that handset makers are finally finding ways of combining the flexibility of handhelds with the mass-market appeal of mobile phones. "We anticipate that smartphone shipments alone will be an order of magnitude greater in 2003 than in 2002. 2002 was the tip of the iceberg for this category of device," said Canalys analyst Andy Buss in a statement.

Smartphones are a separate category from feature phones, which have advanced features such as a built-in camera or a colour screen but are not suitable for organiser-type tasks. Canalys analysts noted that feature phones will continue to outsell smartphones until consumers have come to understand the benefits of the more sophisticated devices, but the firm expects smartphones ultimately to far outsell feature phones.

Consumers are more likely to buy a device if they see it as a mobile phone with added features, a factor which gives smartphones and feature phones a big advantage over wireless handhelds, Canalys said. "Unless you have a very specific application that needs the unique characteristics of a wireless handheld it is hard to see why you would choose it over any of the other form-factor combinations," stated analyst Chris Jones. He advised handheld makers to focus on devices that connect to a mobile phone via integrated Bluetooth, rather than making hybrid mobile phone-PDAs.

The retail channel remains a barrier to convincing customers to buy wireless PDAs, the report found. "The mobile phone retailers struggle demonstrating the benefits to potential customers, while the IT/data-centric channels don't really want to get into the tariff debate that becomes essential with a SIM-dependent device," Jones stated.

While PDAs might not make ideal phones, smartphones are getting better at functioning as organisers, Buss noted: "Gradually a lot of people will realise that the benefits of having just one device outweigh the usability compromises they may have to make."

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