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Will Dual-Mode Smartphones Become The Device De Rigueur?

Not only did revenue from smartphones leap 10% in the first quarter of 2007 compared with the fourth quarter of 2006, sales of Wi-Fi-enabled handsets are on track to top $145 billion in the next three years. Is Wi-Fi the key to spurring smartphone adoption?

That would appear to be the case, based on a new report from Infonetics Research. It states that dual-mode smartphone sales are expected to swell at a compound annual growth rate of 31% between 2006 and 2010. Most of the growth to occur over the next few years will come from developing nations, but developed countries will still add to sales figures. What's noteworthy is that a significant portion of the growth will be found in nonenterprise buyers.

"To date, smartphone purchasers have been largely business power users, but the launch of Apple's iPhone and Samsung's BlackJack—media-playing smartphones that appeal to consumers—is giving the smartphone segment a boost and could change the dynamics of the mobile phone market," said Richard Webb, directing analyst for wireless at Infonetics Research. "Vendors will design more consumer-oriented smartphones and cause fierce competition among incumbent players."

This is already happening. Research In Motion has sprung two prosumer devices, the Pearl and the Curve, both of which have media capabilities as well as business uses. While neither has Wi-Fi, RIM did drop the 8820 dual-mode device onto the market recently. And, of course, Apple just announced yesterday that it sold 270,000 dual-mode iPhones in the 30 hours between 6 p.m. on June 29 and midnight June 30.

An important finding in Infonetics' report is that both the enterprise and consumer are more welcoming of phones with Wi-Fi on board, each for their own reasons. The enterprise is looking to integrate them into their IP PBX architectures, while consumers adopting Wi-Fi phones to take advantage of broadband connections with wireless and VoIP-enabled consumer premises equipment. Infonetics is confident that seamless handover FMC phones (such as those compatible with T-Mobile's HotSpot @Home service) will represent 35% of the dual-mode Wi-Fi/cellular phone market by 2010, versus 3% in 2006.

All this points to the growing appeal of advanced devices that can do more than make phone calls. As mobile phones, smart or not, become more ingrained with how we manage our business and personal lives, the more we'll demand of them.

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