Smartphone Boom Challenging PC Makers - InformationWeek

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Government // Mobile & Wireless

Smartphone Boom Challenging PC Makers

A shift in mobile computing from laptops to smaller devices is forcing PC makers to adjust, research firm says.

The smartphone market will surpass laptops in unit sales this year, and will easily surpass the latter market in revenue by 2012, a market research firm said Tuesday.

The shift in mobile computing to smaller devices will lead to all major PC vendors announcing plans before the end of 2009 to enter the smartphone market, Gartner said. However, the move won't be easy and the researcher predicts none of the vendors will achieve a market share above 2% over the next three years.

Nevertheless, the market projections for smartphones are too compelling to ignore. Smartphone sales this year will grow by 29% year-over-year to 180 million units, overtaking laptop sales, Gartner said.

The trend is expected to continue, and by 2012, smartphone revenue will reach $191 billion, much higher than that $152 billion that's will be spent on mobile PCs, Gartner predicts. While smartphones account for 14% of overall mobile device sales today, by 2012, the devices will make up 37% of global handset sales.

With the exception of Apple, computer makers' cumulative share of the smartphone market has been static at less than 1% for years, Gartner said. But with people turning to smaller devices for computing, PC makers will be forced to direct far more resources into what will prove to be a very difficult market.

"PC vendors will find it difficult to simply use existing supply chains and channels to expand their presence in the smartphone market," Gartner analyst Roberta Cozza said in a statement. "The smartphone and notebook markets are governed by different rules when it comes to successfully marketing and selling products."

Traditionally, PC makers have introduced smartphones based on Microsoft's Windows Mobile platform, which is attractive mostly to business users. To be successful, computer manufacturers will have to also adopt a consumer-oriented strategy, which will be based on shorter product life cycles, fashion design and hardware and software platform diversity.

In addition, PC vendors will have to learn to deal with a distribution channel controlled largely by mobile operators, and will be competing against more experienced and established handset vendors.

"Understanding of mobile consumer behaviours, competitiveness and positioning of their mobile products and relationships with carriers are all barriers that cannot be overcome in the short term," Cozza said. "This will limit any PC vendor presence in the smartphone market to low single digits for some time."

At the enterprise level, a recent InformationWeek online survey found that the smartphone market is in its early stages, but is poised for rapid growth. Of the 1,139 business technology professionals surveyed, 30% of smartphone uses said they use their devices for enteprise connectivity, and 37% said they either occasionally or frequently leave their laptops home in favor of their smartphones.

Many more users would like to ditch their laptops when traveling, but smartphones have yet to reach a level of functionality that would make laptop-free travel possible.

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