Forrester Research today released a report that concludes the term “smartphone” is dying off, as all phones are increasingly considered “smart.”
“We’re transitioning from a world with arbitrary industry categories to one where we just have intelligent phones, not ‘voice phones,’ ‘smartphones’ and ‘feature phones,’” the report states.
The report says consumers don’t understand any of the categories currently employed when describing phones, and that they look for the handset brand or, increasingly, the Internet brands with which the handset is compatible, such as eBay, Facebook, Flickr, Google, MySpace or Yahoo.
Forrester spoke with leading mobile firms, including executives from Apple, HTC, Microsoft, Nokia, Palm and Research In Motion (RIM). Those executives identified three categories that typically indicate a phone is smart, such as whether the phone has the ability to install new applications, the use of particular operating system software and whether a phone has features such as GPS, Wi-Fi, camera, MP3 player or Web browsing capabilities.
The report says nearly all mid-range phones now have core features that were in the past reserved for smartphones, essentially rendering the term “smartphone” meaningless. The report cites a JupiterResearch European Mobile Forecast from July 2008 that showed that by 2013, nearly 98 percent of all phones in Western Europe will come equipped with multi-megapixel cameras.
According to the report, the mobile market will continue to fragment with new operating systems and software. While the report acknowledges the importance of hardware, it appears software will be the differentiator of the future.
“What makes a device smart is what is deep inside, not its looks. The hardware helps devices win beauty awards, but they age fast. By contrast, the software takes years to develop and will deliver years of differentiation,” the report concludes.
Ian Fogg, analyst for Forrester and lead author on the report, says the hardware is very similar in many of the new devices coming to market. “They buy in many of their components, and they’re using quite similar components, and what glues everything together is the software. That’s what really differentiates.”
Fogg cites the iPhone as the perfect example of a device that isn’t really superior in hardware but has managed to create waves in the industry. “The iPhone, on a purely hardware level, is not that differentiated. Google copied that touchscreen within 18 months. If you look at the iPhone’s camera, it’s not that good. But where Apple has really differentiated is how the iPhone does things – through its software.”
Last Friday, AT&T announced an ad campaign that relies heavily on the distinction between smartphones and feature phones (story here). The new ad campaign touts AT&T's high number of smartphone users, claiming the company has twice as many smartphone users as Verizon Wireless.