Bearish View of The Smart Phone Business

Here's a bearish view about the smart phone business. Microsoft and Apple are extracting royalty payments from Google Android suppliers, squeezing their margins.

Apple missed targets for iPhone sales and sales of Research In Motion’s BlackBerry have "collapsed," not to mention the recent multi-day global outage.

Analysts may argue that the rise of products like powerful tablets have hurt smart phone sales. Some of us think that is partly true. Tablet sales have grown much faster than did sales of Apple iPhones or iPods.

So attention now has been diverted to tablets, to some extent. But Mary Meeker, Kleiner Perkins Caufield Byers partner doesn't appear to share the pessimism.

But lower-cost smart phones now are about to pour onto the market, and the high penetration of mobiles means there still is a huge replacement market.

The Smartphone Business Loses Its Luster