80% U.S. Smartphone Penetration by End of 2012?

Is it possible 80 percent of U.S. mobile phones in use by the end of 2012 could be smartphones? The answer is "yes."

To get there, one would only have to assume that current use rates of mobile browsers are a solid indication of current smartphone use, that current rates of usage will grow at current rates of nine percent every quarter through 2011, and then will increase one percentage point faster during each quarter of 2012.


U.S. mobile users increased their use of browsers, downloaded applications and social networking at about a nine percent rate each during the first quarter of 2010, according to comScore. At that rate, by the end of 2010, 39 percent of mobile subscribers will use browsers, 38 percent will be using downloaded applications and 25 percent will be using social media.

If that rate continues throughout 2011, by the end of that year 55 percent of mobile subscribers will be using browsers, 53 percent will be using downloaded applications and 35 percent will be using social networking.

In an average month during the January through March 2010 time period, 64 percent of U.S. mobile subscribers used text messaging on their mobile device, up 0.6 percentage points compared to the fourth quarter of 2009.

Browsers were used by 30 percent of U.S. mobile subscribers, up three percentage points over the fourth quarter of 2009. About 29 percent of mobile users downloaded applications, up three percent from the fourth quarter of 2009.

Some 19 percent of mobile users used social networking sites and blogs in the first quarter of 2010, up three percent over the fourth quarter of 2009.

So the issue is what would be different about your life or your business if 80 percent of mobile users are on smartphones by the end of 2012, and those smartphones can download at speeds between 3 Mbps and perhaps 12 Mbps, and can upload at speeds from 1 Mbps to perhaps 5 Mbps.

Click on the image for a larger view.

See more detail here

What Gets Cannibalized by iPad and Other Tablets?

As you might have expected, though lots of people think the Apple iPad is a gorgeous device, lots of people also think it is a bit pricey.

So far, iPad buyers are heavily skewed to 30-somethings and 40-somethings who presumably are well along in their careers and have both the appetite and the means to splurge on one.


Some technology observers have been predicting the demise of the netbook for some months, and with the launch of the Apple iPad, we get our first chance to see whether cannibalization is happening.

The basic line of thinking is that netbooks get squeezed between more powerful smartphones and tablet devices such as the iPad.

A new study from Morgan Stanley concludes that tablets in general will be a big threat to netbooks, as some have suggested.

Netbook sales growth has been significantly flatter lately. Sales still are increasing, just not at the rate they were before. Last July, growth was at 641 percent. In December, growth was 179 percent, and in January it dropped to 68 percent.

According to Morgan Stanley/Alphawise, the biggest product category likely to be cannibalized by potential iPad customers is netbooks and laptops. About 44 percent of potential iPad customers say they'll get it instead of a notebook or, presumably, netbook.

About 27 percent said they'd buy an iPad over a desktop.

To be sure, netbook sales were slowing before the iPad launch, so the slowing netbook growth rate can't be blamed completely on the iPad.

Still, it seems inevitable that netbooks and other cheap ultraportables will face competition from the iPad.

Product cannibalization potential

Smartphones Have Outsize Impact on Mobility Business

Despite the fact that smartphones have only about 19 percent share of the U.S. handset market, they have outsize importance simply because smartphone use is growing so fast, implies growth of mobile broadband revenue and is key to the hopes new suppliers have for cracking the handset market.

Browsers were used by 29.4 percent of U.S. mobile subscribers (up 2.4 percentage points), while subscribers who used downloaded applications made up 27.5 percent (up 1.8 percentage points).

Some 18 percent used social networking sites or blogs, up 2.9 percentage points to 18 percent of mobile subscribers. About 13 percent report they listened to music on a mobile device. About 22 percent say they played games on their mobiles., up about half a percentage point.

Some 234 million Americans age 13 and older were mobile subscribers, while 45.4 million people owned smartphones in an average month during the December to February period, up 21 percent from the three months ending November 2009.

In an average month during the December through February 2010 time period, 64 percent of U.S. mobile subscribers used text messaging on their mobile device, up 1.9 percentage points from November 2009 levels, says comScore.

Those differences also are reflected in market share of feature and smartphones. In the broader feature phone market, Motorola has 22 percent share, LG 22 percent, Samsung 21 percent, Nokia nine percent and Research in Motion eight percent.

In the smartphone market RIM has 42 percent share, Apple 25 percent, Microsoft 15 percent, Google nine percent and Palm five percent. Google grew the most over the quarter ending in February, gaining five share points. Apple's share was flat and Microsoft lost five points.

Touch Screens Lead to Higher Device Satisfaction, Survey Suggests

Overall satisfaction among smartphone and traditional handset owners whose phones are equipped with touch screens is considerably higher than satisfaction of owners of phones that have other input mechanisms, according to J.D. Power and Associates. That likely comes as no surprise, given the impact the Apple iPhone has had on the entire handset business.

Among smartphone owners whose device has a touch screen, satisfaction averages 771 on a 1,000-point scale, nearly 40 index points higher than among those whose smartphone uses other input methods, such as a text keyboard.

In order of importance, the key factors of overall satisfaction with traditional wireless handsets are: operation (30 percent); physical design (30 percent); features (20 percent); and battery function (20 percent).

For smartphones, the key factors are: ease of operation (26 percent); operating system (24 percent); physical design (23 percent); features (19 percent); and battery function (eight percent).

Apple ranks highest in customer satisfaction among manufacturers of smartphones with a score of 810, and performs particularly well in ease of operation, operating system, features and physical design. RIM BlackBerry (741) follows Apple in the rankings.

LG ranks highest in overall wireless customer satisfaction with traditional handsets with a score of 729, and performs well in all five factors, particularly physical design, features and operation. Sanyo (712) and Samsung (703) follow LG in the rankings.

The study finds that both smartphone and traditional handset owners are increasingly using their phones for entertainment and sharing media. Among traditional handset owners, 25 percent indicate they frequently send and receive multimedia and picture messages, an increase of 25 percent from just six months ago.

Smartphone users are nearly twice as likely to share multimedia messages. In addition, nearly one-fifth (17 percent) of smartphone owners with touch screen-equipped handsets indicate they frequently download and watch video content on their device, which is significantly higher than the segment average.

Global Positioning System capabilities are a desired feature among both traditional mobile phone and smartphone users. More than one-third (35 percent) of traditional mobile phone owners say they want GPS features on their next handset purchase, while 15 percent of smartphone owners say they want GPS.

Some 60 percent of smartphone owners say they download third-party games for entertainment, while 46 percent say they download travel software, such as maps and weather applications.

About 31 percent say they download utility applications, while 26 percent say they download business-specific programs, indicating that smartphone owners are continuing to integrate their device usage into both their business and personal lives.

link

Smartphones a Majority of all U.S. Devices in 2011

By 2011, there will be more smartphones in use in the U.S. market than feature phones, Nielsen now projects.

The share of smartphones as a proportion of overall device sales has increased to 29 percent for phone purchasers in the last six months and 45 percent of respondents to a Nielsen survey indicated that their next device will be a smartphone.

Given normal handset replacement cycles, it is possible to project that the installed base of devices will shift dramatically over the next two years. For those of you who wonder about such things, that would likely make the United States one of the world leaders in smartphone usage.

related story

One Problem with Smartphones: More Dropped Calls

U.S. wireless customer experience of wireless call quality has dropped over the last six months, according to J.D. Power and Associates.

Over the past six months, customer-reported call quality problems have increased significantly, from 11 problems per 100 calls in 2009 to 13 problems per 100 in the most recent study.

Dropped calls are on the rise, from four problem per 100 calls six months ago to six problems per 100 calls in the latest survey.

On average, smartphone customers experience problems at a rate that is 6 PP100 greater than problems experienced by traditional handset customers. In addition, smartphone customers are nearly three times more likely to experience dropped calls than are traditional mobile phone customers.

"Interestingly enough, consumers using less sophisticated (more traditional) handsets were nearly three times less likely to experience a dropped call than their smartphone counterparts," says J.D. Power.

A rational person might say those findings support the claims made by testing organizations that smartphone design can, and apparently does, have an impact on the ability of such devices to maintain calls, either because of mobile Web signaling interference or even smartphone design issues.

Frustration with call quality is often a leading reason why consumers choose to switch mobile carriers, J.D. Power notes. The study results show a PP100 rate six times as great (42 PP100 vs. 8 PP100) for consumers who report they “definitely will switch” providers in the next twelve months when compared to users who report they will “definitely not switch” carriers.

10 Times More Smartphone Users and App Store Sales in 4 Years?

There will be 970 million smartphone users by the end of 2013, up from 300 million in 2010, according to analysts at research2guidance, a Berlin-based market research firm. In 2009 there will only about 100 million smartphones in use.

As a result,  annual app revenues will grow from $1.94 billion in 2009 to $15.65 billion by 2013.

An order of magnitude growth (roughly 10 times) in users and app store sales in four years would be steep, indeed.

Enterprise Workers Ready to Ditch Their PCs for Smartphones?

Something rather unusual seems to be happening in the enterprise mobility space. According to a recent survey taken by iPass, 63 percent of mobile employees prefer to use a smartphone, not a laptop, as their primary mobile device, for trips of any length.

For trips of up to five days, 59 percent of respondents prefer to carry a smartphone, while 41 percent prefer a laptop. For trips lasting longer than 30 days, 64 percent prefer a smartphone to a laptop.

That likely is testament to the high value traveling workers place on voice and text communications, as well as the increased capabilities smartphones now offer, including email and Web access.

But the findings also suggest that some enterprises are over-investing in laptops and software and might need to look at scenarios where mobile or traveling workers can get along just fine with smartphones.

There is another and possibly darker view here as well. Industry suppliers have been touting mobility investments as a driver of productivity. As it now appears, enterprise workers do not even want to carry laptops with them when traveling. So what is the value of all those investments in remote access?

Granted, most enterprises likely are trying to get a better handle on mobile phone expenses, so indiscriminate replacment might not be wise. But the survey also suggests the near-universal embrace of the BlackBerry has "soft" support from users.

According to the iPass survey, while 32 percent of mobile employees ranked the BlackBerry smartphone as their mobile device of choice, 54 percent of BlackBerry smartphone users would switch to an Apple iPhone if it was supported by their enterprise.

"Mobility" also once was an issue of supporting traveling workers. Today every employee
is a potential mobile employee, iPass says. While many mobile employees have some business travel, many more are logging in from home.

About 68 percent of iPass survey respondents did not travel during the last quarter of 2009, but  45.8 percent of mobile employees logged in from home at least twice a month, and 16.8 percent logged in more than ten times a month.

Excluding home and the office, mobile employees most often log in from hotels (42.6 percent), airports (27.2 percent), retail outlets and restaurants (27 percent).

According to the iPass survey, while 32 percent of mobile employees ranked the BlackBerry smartphone as their mobile device of choice, 54 percent of BlackBerry smartphone users would switch to an Apple iPhone if it was supported by their enterprise.

How PC Usage is Different from Mobile

To state the obvious, users behave differently on their mobile devices than they do on their PCs, which ought to have implications for a world where perhaps half to two thirds of all Web and Internet access is from a mobile device.

A study of 16 information workers over a period of time illustrates some of the differences (again, keeping in mind that habits likely continue to evolve).

Mobile service providers, for example, know there is a huge difference between users on PCs and smartphone users.

Namely, PC users consume lots more data. And that is what the study conducted by Microsoft and the University of Washington also noted. The other obvious observation was that phones are used for voice and text messaging. PCs can be used for those applications, but in this study of office workers, that was not the case.

And productivity applications, though important for desktop use, was not the focus on mobiles, where "maps" seem to be more important, as you might expect. Users relied on both devices for email and Web access. Beyond that, the usage profiles were different.

Aside from the sheer difference in volume, understandable given the "on the go" nature of a mobile phone, users did different things on their mobiles. One might hypothesize that mobile device input-output limitations and time constraints (people are on the go) account for much of the difference in behavior. Heavy document or file interactions are not prevalent on mobiles.

That doesn't mean people will stop doing things at their desks that require full PC support. It does suggest that as use of mobiles becomes a bigger driver of Internet usage, the key applications will change. Mobiles are "becoming PCs," but that does not mean they will be used the same way, at all. The Microsoft study simply confirms that fact.

Android Downloads Explode, Apple Continues High Growth, BlackBerry Leads

Visits to Myxer’s mobile site from users on the Android operating system grew 350 percent in 2009, compared to iPhone, which grew 170 percent, Myxer says.. In total, Myxer delivered seven times more downloads to Android devices than iPhone devices in the fourth quarter of 2009.

Keep in mind that Android starts from zero share, so extremely-high rates of growth are not unexpected. The bigger news would have been Android downloads failing to gain traction.

The analysis was made on Myxer’s 30 million members and their behavior relating to mobile entertainment downloads.

In part, Android growth is driven by the increasing number of Android devices now available, as well as a huge marketing push by Verizon Wireless to support its Droid introduction.

In December 2008 only one handset, the HTC Dream/G1, was operating on Google’s open source Android operating system. By December 2009, Myxer had seen nine different handsets running the Android OS.

• The HTC Dream/G1 remained the leader throughout 2009 garnering 35 percent of the unique users completing downloads on Android handsets. That makes sense, as the Verizon Droid launch did not happen until December 2009. It would be shocking if the Droid did not appear at the top of lists by the end of 2010.

“While we’ve seen the Android OS emerge as a serious competitor in the operating system landscape, RIM’s operating system still dominates the smartphone market on Myxer’s mobile site, growing from 51 percent in 2008 to 67 percent in 2009,” saysMyk Willis, Myxer CEO.

According to research conducted in the fourth quarter of 2009, Android users download seven times as many ringtones, wallpapers, videos, applications, and games as iPhone users.

Still, Apple iPhone downloads also grew 170 percent.

On the other hand, it is worth noting that RIM’s Blackberry Curve remains the number one phone on Myxer’s mobile site for the second year in a row, garnering close to 10 percent of visits in both 2008 and 2009. The Blackberry Curve is just one of the 1,500 different handsets that Myxer delivered content to in 2009.

Windows Mobile and Palm both lost ground in 2009, combining to relinquish 24 percent of the smartphone traffic on Myxer’s mobile site and giving ground to the Android, iPhone, and RIM.

AT&T Announces New Pricing for Unlimited Mobile Plans

AT&T has announced new unlimited plans across all of its devices. The new plans, available beginning Jan. 18, 2010, feature an unlimited voice plan for $70 a month. "Family Talk" customers (two lines) will be available for $120  a month.

Texting plans remain unchanged at $20 for unlimited plans for individuals and $30 for Family Talk plans.

"Quick Messaging Device" (feature phone) customers can buy unlimited talk plans for $70 a month and Family Talk customers can buy unlimited talk plans for $120 per month (two lines).

These plans also require a minimum of $20 per month for individual plans and $30 per month for Family Talk plans for texting or Web browsing packages for new and upgrading customers.

All smartphone customers, including iPhone customers, may now buy unlimited voice and data for $100 a month.

For smartphone customers on Family Talk plans (first two smartphones), unlimited voice and data is now available for $180 a month. Texting plans remain unchanged at $20 for unlimited plans for individuals, $30 for Family Talk Plans.

Beginning Jan. 18, 2010, existing AT&T customers can change to any of the new plans without penalty or contract extension

Is Nexus One A Particular Threat to Service Providers?

Does Google's Nexus One launch mean anything in particular for mobile service providers? That might be a matter of some debate at the moment. Some observers were expecting something "more disruptive." Perhaps an ad-supported voice service; maybe a completely unlocked device able to work on any carrier's network; maybe a business model that clearly delineates a new role for the handset provider.

That didn't happen. Some observers think the bigger innovation is the way Google is selling from a
Web site. Some might see too much difference there, either. Selling from a Web site isn't too unusual these days, and Apple's retail stores and existing carrier Web sites.already provide models for handset distribution aside from the branded mobile carrier stores.

To be sure, an "unlocked handset" strategy always will be tough in the U.S. market until such time as most carriers are using one single air interface and handsets are equipped with enough frequency agility to adapt to whatever network si providing access. An unlocked handset today means a choice of no more than one or two major carriers (one WiMAX, two CDMA and two GSM).

The other angle is that U.S. consumers have not yet shown any desire to pay full retail price for a handset, when they can get a subsidized device at the price of a two-year contract. People might gripe about the existence of contracts, but they have choices. They can pay full retail for their devices and avoid the contracts. Not many make that choice.

The more interesting observation is about what various Android devices really are. A BlackBerry is an email device; an iPhone is a Web surfing device. Many feature phones are texting devices. Some models are social networking devices, or at least highly optimized for that purpose. Some devices are optimized for navigation.

Could a new niche be developing for a "search" device? Is "finding stuff" a sufficiently robust need that at least one of the Android devices becomes recognized as the single best device for finding things? That seems to me the most interesting question about what the Nexus One or broader family of Android devices might raise.

Matters always can change, but at least for the moment, it does not appear the Nexus One is especially disruptive of the existing mobile business model or standard practices, either.

http://connectedplanetonline.com/mobile-apps/news/googles-nexus-effects-0115/?imw=Y

Are Emerging Market Consumers Different?

A new study by Accenture suggests that, in a globalized world, consumer demand for a wide range of technology products is remarkably similar, at least among those emerging market buyers with disposable income.

In fact, consumers in emerging markets are twice as likely as those in developed markets to purchase and use consumer technology in the next year and are more willing to pay a premium for “environmentally friendly” consumer electronics products, says Accenture.

The Accenture survey of 16,000 consumers in four “mature” countries (the United States, Germany, France and Japan) and four “emerging” countries (China, India, Malaysia, and Singapore) suggests current and future spending and usage patterns for 19 different consumer technologies, including smartphones, high-definition TVs and computers, is remarkably similar in developed and emerging markets, with one exception: developing market consumers are more likely to buy smartphones, PCs and other devices over the next year.

Compared with consumers in mature countries, consumers in emerging countries are more than two and a half times as likely to buy a smartphone during the next year (52 percent  compared to 20 percent).

Emerging market consumers also are more than twice as likely to have bought a smartphone in the past year (67 percent compared to 32 percent).

Twice as many emerging market consumers are likely to have bought a computer in the past year (40 percent vs. 20 percent). They also are more than twice as likely to have at least occasionally played video games on handheld devices (58 percent compared to 28 percent).

Do they use social networking? Yes, at about a 69 percent rate, compared to 38 percent in the developed markets.

Emerging market consumers also are significantly more likely to pay a premium for consumer products marketed as being environmentally friendly (84 percent compared to  50 percent).

“One of the reasons for this emerging-country growth is the rapid expansion of the middle class with its substantial disposable income,” says Jean-Laurent Poitou, managing director of Accenture’s Electronics & High Tech industry group.

“Furthermore, our research shows that the increased demand for smart connected wireless devices such as smartphones is being driven by social-networking applications.

“Emerging-country consumers use mobile devices more than they do computers to access Internet-enabled applications and services, and consumers in mature countries are also headed in that direction.”

How Will "No Contract" Smartphone Sales Affect Adoption?

What happens to smartphone sales, data plan sales, consumer behavior and mobile service provider marketing if phones cannot be provided at subsidized prices? If sales of smartphones fall, then use of mobile broadband services likely will grow more slowly. So smartphone prices do matter.

Up to this point, mobile phone subsidies have been seen as a “necessary evil” for the development of mobile phone services and have helped kick start the mass market for mobile phone services in many markets around the world. And it would be hard to underestimate the role subsidized handet pricing has had.

Handset subsidies are viewed as a loss leader strategy, a means for bringing new subscribers onboard, or encouraging existing subscribers to churn away from their existing network and onto a competitor’s.

But investors do not like the practice, as it puts pressure on service provider cash flow. Regulators do not seem to like the practice because subsidies mean contracts, and contracts lessen consumer ability to change carriers.

Global smartphone volumes will represent 14 per cent of total mobile devices sales in 2009, growing by 23.6 per cent from 2008 and to 38 per cent by 2013, say analysts at Gartner.

Smartphone prices are falling as shipment volumes increase, and a new study from ABI Research finds that while in 2007 only 18 percent of smartphones on offer cost under $200 retail, that percentage has already grown to 27 percent in 2009. By 2014, say the firm’s forecasts, 45 percent of the smartphones shipped that year will be priced below $200.

“Manufacturers see consumers increasingly demanding smartphones, because of their better understanding of the value that a smartphone delivers,” says mobile devices practice director Kevin Burden.

The result: more and more smartphones and conventional phones are priced in similar ranges. According to ABI Research, by far the greatest increase in smartphone shipment volumes over the next five years will be found in the $100-200 price range.

But what happens if new government regulations bar the practice of phone subsidies, and consumers must pay full retail price for new high-end models? Less buying.

On the other hand, there will be more buying of cheaper models. That doesn't necessarily mean smartphone sales overall will plunge, but it will be far more difficult to sell massive quantities of new high-end devices, as few consumers have shown any willingness to spend $600 for unlocked devices.

Of course, there are other possibilities. Perhaps some providers will be able to create new payment models, such as offering installment plans for purchase of new high-end devices. A few might consider other subsidy programs that serve up ads and default applications in exchange for lower-cost devices.

Advantage also will be gained by manufacturers that can wring out costs, offering high-performance devices that just cost less to begin with.

What seems clear, though, is that mandated sales of full price devices, sold without contracts, will have massive impact on the take rate for high-end devices.

Google-Branded Phone Coming in January?

Rumors about a Google-designed and Google-branded smartphone have circulated over the past several years, though the company consistently had denied the reports. But the rumors are building again. TechCrunch seems to think the umors are more credible this time.

To be sure, Google repeatedly has said it is not in  the phone-making business.  “We're not making hardware,” Andy Rubin, who heads up Google Android development. “We're enabling other people to build hardware.”

Of course, some might parse the words and say that Google doesn't have to build its own phone: it simply has to commission a company that does build phones, to build one, with tightly-integrated Google control over the software load. There are many nuances to such an approach.

The device could be tightly integrated, but not Google branded. It could be Google branded but not exclusive. It could operate as an unlocked data-only device on a single air interface or several.

A Google-branded and controlled device might fly in the face of the open source nature of the operating system, which so far has featured a loosely-coupled approach.

It also might open a new and unwanted level of channel conflict with the firms that are counting on Android to power their own devices and create a robust applications business. On the other hand, such a move could be viewed as an effort to demonstrate what is possible using Android, more than anything else.

The current rumors say the device is built by HTC, is quite thin, does not have a keyboard, and uses voice recognition for virtually all apps.

Cynics might argue "leaking" rumors of a game-changing device are a time-tested way of "freezing" sales of competitive devices. And there is at least some anecdotal evidence that some potential Android sales are on hold until the rumors convincing are disproved or confirmed.

To be sure, any Google move to build a tightly-integrated device, Google branded and supported, would be a fundamental shift in approach that would imperil its effort to foster widespread use of the Android operating system by a wide range of manufacturers and service providers.

Apple is the only company in the mobility business that delivers both the hardware and software on a tightly-controlled basis.

Are Android Users Different From iPhone Users? Does it Matter?

It is a bit early to determine how Android users might be different from other smartphone users, including iPhone customers. Some early studies suggest Android users are heavier Web application users than iPhone users are.

Others, such as a recent survey by comScore, suggest Android users are slightly less intensive users of mobile Web applications.

So far, the comScore study suggests, Android users are heavier users of video applications, capturing and uploading video significantly more than iPhone users do.

The behavioral pattern might be important if one assumes the Android has potential to create one or more new niches in the smartphone market.

Lots of attention now is focused on whether Android devices are "iPhone competitors." Some might argue it is more likely Androids will appeal to different types of users, for different reasons, as most BlackBerry users likely have different priorities than iPhone users.

People Don't Buy Smartphones, They Buy the Experience and the Feeling

All engineering involves choices, and that is true of all smartphone design as well.

Perhaps one of the background pressures is the desire to create devices that perform reasonably across a range of functions.

But that might not be a formula for success. A recent study by Interpret might suggest that instead of balancing features, it might be better to "unbalance" and produce a device that is demonstrably better at one thing.

Though one can argue we are early in the adoption cycle, a panel of consumers indicated that the Palm Pre made them feel "smart," "trendy, hop or cool," and "productive" within some range of acceptance for a smartphone device.

The problem would seem to be that Pre scores highest on the emotional attribute that users say is least important of the top three. The Pre produces emotions on the "hip" and "productive" scale that make it analogous to the BlackBerry Storm.

The bigger problem is that the Pre does not produce unusually high key emotions on any of the top three most important measures smartphone buyers say are important to them. BlackBerry and iPhone probably are the best models. Each of them scores unusually high on at least one of the three key emotional drivers smartphone buyers say motivate them.

So maybe designers should forget "balance." So far, no single smartphone unit scores unusually high on the "it makes me feel smart" measure. The iPhone owns the "hip, cool, trendy" space. The BlackBerry owns the "it makes me feel productive" niche.

Smartphones are bought because of the "feelings" they produce, not the features they provide. As the saying goes, smartphones "sell an experience."

Smartphones are Changing the Wi-Fi Hotspot Business

Smartphones are changing the nature of the hotspot business, it now appears. Originally envisioned as a way to provide "outside the home" and "outside the office" connections for laptop and notebook PC users, hotspots now are becoming important sources of broadband connections for smartphones.

One example: iPass, which used to focus on managing PC authentication processes for traveling enterprise workers, now finds it is focusing more attention on managing authentication processes for enterprise smartphones, says Rick Bilodeau iPass VP.

"Smartphones are the new thing," he says. "Now it is smartphones and Blackberries." The software is available for BlackBerry, Symbian and iPhone at the moment, and iPass is watching the Android, though it hasn't seen enterprise demand for that device yet.

As a firm that manages broadband access for hundreds of Fortune 2000 companies, iPass has to manage connections created on hundreds of global networks, but now scores of smartphone devices as well.

To make that process easier, it created an "Open Device Framework," a standardized interface to iPass client software that allows enterprises to write their own XML scripts for the specific dongles, phones and other devices they want to support.

The company also now preconfigures Mi-Fi routers, loading SSID information directly into the boxes before they are delivered to their users, for example. The iPass log-on software also can be preloaded. "We're first to do this, we think," says Bilodeau.

ODF is available now and the Mi-Fi featuers will be available in December 2009, he says.

SME Smart Phone App Gap

As you might expect, 65 percent of heavy smart phone-using small and medium-sized organization associates say access to corporate applications and data anywhere and anytime would most benefit them in their work roles, according to a survey undertaken by the Yankee Group. Smart phone-centric employees generally have jobs that require more remote working and therefore find some value in smart phone technology.

Excluding corporate email, the most-used applications by employees who have smart phones are Web browsing, business
productivity suites such as Microsoft Office, customer relationship management, project management and corporate instant messaging.

However, no more than a quarter of SME employees are using these applications on their smart phone in the office. Also, in most cases, no more than a handful of SME employees are using these smart phone-enabled applications outside the office in work-related venues such as airports and hotels.

Considering only those SME associates whose primary mobile device is a smart phone, material requirements planning and supply chain management applications are top applications.

However, none of the SME employees in the Yankee Group survey in this segment use MRP and SCM applications on their smart phones regardless of workplace venue.

Both MRP and SCM applications are valuable tools for operations-based employees to track flows of raw materials, pre-finished goods and finished goods at various stages in the supply chain and manufacturing process. Non-office use of these applications is stymied today by a lack of mobile-enabled solutions, Yankee Group researchers argue.

Things might be improving. The Apple iPhone helps with Web browsing. User experience for productivity apps is hampered by small screens, formatting issues and device processing power. Salesforce.com helps with CRM, but the need to support multiple IM clients is cumbersome.

The point, Yankee Group analysts say, is that there is lots of room for further refinement of user experience that could boost use of mobile apps by small and mid-sized business associates.

In Business, BlackBerry Users Happiest

BlackBerry devices manufactured by Research in Motion rank highest in overall customer satisfaction among business wireless smartphone users, according to J.D. Power and Associates.

RIM ranks highest in overall smartphone customer satisfaction with a score of 702 points on a 1,000-point scale, performing particularly well in the operating system factor, which includes the speed of moving between applications and speed of sending/receiving e-mails. RIM also performs particularly well in battery aspects, including the length of battery life. Treo manufacturer Palm (698) and Samsung (698) tie to closely follow RIM in the ranking.

Highly satisfied owners are more than 50 percent more likely to repurchase the same brand than those who are not satisfied with their smartphone, J.D. Power says.