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Innovation, Upheaval Rule Smartphone Market

Upstart and established manufacturers, some targeting new sets of customers, are on the march. Meantime, prepare for a shakeout among operating systems.

HTC Shift
HTC Shift
Ultramobile PC has a tilt-up screen and a full laptop-style keyboard, plus multiple connectivity options.
Until recently, when you thought of smartphones, you thought of the BlackBerry, maybe the Treo. Now, an array of innovative and relatively inexpensive devices--from both upstart and established manufacturers, mostly aimed at new customers--is hitting the market. Meantime, the spread of operating systems such as Windows Mobile, Symbian, and Linux that run many different devices is rallying developers of smartphone applications.

The smartphone surge dates to the release, in spring 2006, of Motorola's Q, the first "prosumer" smartphone. With a full QWERTY keyboard and Windows Mobile in a thin, elegant design, and priced well below $200, the Q kicked open the door for a new category of devices that appeal to customers for whom a $400 BlackBerry is out of reach. That trend continued with Research In Motion's answer to the Q, the Pearl, a thin device released late last year with much of the capability of a BlackBerry and a price tag of less than $200. Smartphone activity has accelerated over the last few weeks at the 3GSM conference in Barcelona, Spain, and at last week's CTIA Wireless show in Orlando, Fla.

At CTIA, Taiwan's High Tech Computer debuted two interesting devices: the Shift and the Advantage. The Shift isn't really a smartphone per se but what's called an ultramobile PC. About the size of a pair of CD jewel cases laid end to end, the Shift has a tilt-up screen and a full laptop-style keyboard, plus multiple connectivity options, including GSM, Edge, UMTS, HSDPA, Bluetooth, and Wi-Fi. Cellular voice calling requires a headset.


Motorola MC35
Motorola MC35
Durable voice/data communications device that's an outgrowth of the company's Symbol Technologies acquisition last year.
Rather than run on a conventional mobile operating system such as Windows Mobile or Symbian, the Shift runs on the full Windows Vista Business. Being cellular-capable, the Shift is eligible for carrier subsidies that will bring the price far below the $2,000 at which HTC is likely to list it.

While the HTC Advantage also has a unique form factor, it's more in line with the smartphone-centric Windows Mobile devices for which the company is known. Cramming a lot into a small package, it offers all the same wireless capabilities as the Shift but has a thin QWERTY keyboard that connects to the screen magnetically. Both devices will be available through regular HTC channels later this year.

Founded in 1997, HTC epitomizes the transformation of the smartphone industry: It has moved from being a pure OEM, making devices for sale by other companies, to a manufacturer that markets smartphones under its own brand. Four or five companies now control 80% to 85% of the smartphone device market, notes Stuart Robinson, director of handset component technologies at Strategy Analytics, "and then another 100 are struggling for the other 15%. HTC seems to be one of those that is growing quickly."

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