Smartphones Go Mass-Market

At last year's 3GSM event, Symbian stressed the importance of driving down the cost of smartphones so that they became mass-market devices rather than solely high-end ones. To that end, in the runup to this year's event, the company announced it was revamping its licensing fee structure in a move that could drastically reduce what some companies pay to use its software, and also announced in conjunction with Nokia and Freescale the development of a single-chip reference platform that promises to drastically reduce the bill of materials for manufacturers that use it. Combined with an announcement from Vodafone that it would work with Nokia on its S60 UI to make it a preferred handset platform and develop software that OEMs could take to quickly and easily build smartphones, it would certainly appear that Symbian's push into the mid-range will soon bear fruit. Similarly, Microsoft this week also announced it was working with Texas Instruments on another reference platform with the same goals.

A Vodafone exec said this morning that the operator spends 6 to 7 billion euros per year on handsets -- and it makes very little money from them. Any reduction in cost on that kind of scale will generate big savings for the company, but the motivation goes deeper than that. As services like voice and messaging become commoditized, carriers are under pressure to get users to buy into other mobile services. But the handset landscape is incredibly fragmented, making the deployment of services across a wide customer base quite difficult. Vodafone says it will use S60 and one or two other platforms as its preferred software environment, allowing to create a consistent user experience as well as offer a consistent range of services across handsets. Within two to three years, it expects the vast majority of its handsets to use of of these platforms, and giving a big push to Symbian and other OS vendors. This kind of traction will provide a huge opportunity for content and service providers, but will also change mobile application development. The smartphone application market today still relies heavily on the model used for PDAs: selling individual applications to users. But the mass market really isn't interested in applications; they're interested in services, making the application little more than a means to an end.