Where platforms make way for carriers
"Smart phones" such as Treo, NPD's Ross Rubin informed us, represent a small portion of the overall handheld device market. A check of various market analyses rate that market somewhere between "minor" and "trifle," depending on whom you ask. As a result, he said, as long as PalmSource continues to play to that niche market, whatever moves they may make might not have much impact on handhelds any more. "I think right now, PalmSource is a wild card," he remarked, "and we really don't know what the future is going to be until Access is ready to talk about what their plans are." In the meantime, one-time rivals such as Symbian are playing to a broader base of "feature phones" - devices geared toward consumers, not enterprises, that tout functions such as picture-taking and tune-playing over secure e-mail and connectivity.
In the "feature phone" market, said Rubin, consumers voice their preferences by signing up for the features, facilities, and carriers they want, much less the provider of the underlying operating system. After all, how many consumers really know they're using a Symbian OS phone anyway? Years ago, he said, consumers never really voiced a need or desire for cameras or tune-players on their cell phones. But consumer demand for such features has risen so quickly because it was the "carriers" - T-Mobile, Sprint, Verizon, Cingular, US Cellular - who put them there, believing as Rubin said, "they will jump-start a market that they can eventually monetize."
In the consumer PC market, a majority of buyers continue to trust Windows to provide them with their applications, even if they're not sure what they want to do with them yet, and even if they're not all that pleased with the results later. Buyers choose Windows because the alternatives don't seem like alternatives. In the handheld space, Rubin argues, there are some similar conditions...some. The "killer app" for handhelds has yet to materialize. Even built-in digital cameras on cell phones don't really count yet. The compelling application that makes the smartphone a "must-have" consumer device, as well as an essential enterprise tool, waits to be developed. But unlike in the PC space, there are so many options for developers to realize the "killer app:" Symbian OS, Java with BREW, Windows Mobile, Linux, BlackBerry Connect, and the "P" word(s). "So in some ways, it's a more dynamic environment where the operating system and the application are not as strongly tied together in the real world as they are on the desktop," said Rubin.
This is where RIM has an unusual advantage, Rubin added. As a provider for secure e-mail and a network for connecting to it, BlackBerry is both an application and a platform. It already is the "killer app" for the enterprise, he said. But that functionality and that appeal does not extend to the consumer side, the "feature phones," where secure connectivity has a hard time mingling with iTunes and photo sharing. It might not be so much that consumers wouldn't want it - if they knew what it was - but that the carriers thus far aren't asking for it.
"Carriers have a vested interest in having a broad portfolio of handsets with different features," remarked Rubin. The very notion of variety is what most prominently distinguishes the development of handheld devices from that of PC devices. Perhaps the fairer comparison, he proposed, is with the Web. "No two Web experiences are really identical, [nor] two Web sites really identical. I think in many ways, carriers are looking to take that kind of diversity and make it available to consumers through different kinds of applications, and optimizing different kinds of handsets. Carriers certainly have an interest in keeping healthy competition alive among different handset manufacturers."