Smartphones: The Time for Change is Now
Ten years ago, when I got my first cell phone, I avoided making calls for fear of running up a huge bill. Back then; there were no plans with minutes. You simply paid per minute for each call you made or received. Today standard voice cell phone plans are finally affordable. There is a plan for everyone, even the chatterboxes among us. Two years ago, I was very cautious about using my Treo 600 because I was only allowed 5MB of data usage a month. Today, with my Treo 700p, I am finally free to use my device the way I want to. I have a plan with enough minutes (I don’t talk on the phone all that much) and my unlimited data plan is affordable.
In a recent Q&A session Palm CFO Andrew Brown pointed out that one of the barriers of entry preventing people from purchasing a smartphone was the cost of the data plan. Without a data plan, that multi-function Internet device becomes an expensive cell phone and day planner. I’ve talked with people from around the United States and abroad who have said that they count their megabyte usage just like I did because data services can be very expensive. I tend to agree. $25 a month for a 5MB data plan seems a bit expensive. If carriers want to grow the subscriber base then now is the time to start phasing in some price cuts. And I’m not just talking about new subscribers either.
Wireless handset makes don’t get off the hook that easily either. Device manufacturers have to bear some of the blame when talking about the slow adoption rate of smartphones. All one has to do is to take a look at the price of an unsubsidized Treo, Blackberry, or catch a glimpse of the rumored prices for an upcoming product from the “digital fruit” company and sticker shock will set in. It device manufacturers are unhappy with the adoption rate of smartphones in the mass market, they are going to have to work much harder at reducing the costs for these devices. The convenience of a converged device is no longer sufficient to close the deal. The side effect of having highly subsidized feature flip phones is that many consumers are just unwilling to spend the extra money for devices and features they don’t understand.
A few things need to change before smartphone sales in the consumer market can soar. Device makers and wireless operators need to find new ways to lower the costs of their products and services. There is evidence that this is already happening. Palm has apparently begun a program to develop a single hardware platform, which then becomes the base design for two or three different Treo smartphones. And Palm has been working with the carriers to bring the Treo 680 smartphone to market at the $199 price point. Wireless carriers need to follow Sprint’s lead in offering a cost effect $15/month unlimited data plan. When customers are worried about overage charges they aren’t looking for new ways to use their smartphones to enhance their lives.
The one thing that really needs to change before smartphones can begin to sell like hot cakes is their ease of use. People hate to read thick and boring user manuals. When the customer picks up the wireless handset, they need to be able to start using it with a very small learning curve. This is a fairly substantial challenge for many companies. One of the reasons that the iPhone is generating such a buzz in the smartphone industry is that many in the media have called the new interface revolutionary. Whether or not the paradigm of mobile computing has really changed has yet to be seen. I do believe that Apple should be given credit for at the very least sounding a wake up call to device maker, software developers, and wireless carriers.
The period of smartphones-are-only-for-early-adopters is coming to a close. It is now up to handset makers and wireless network operators to take the next step to bring smartphones out of the lofty corporate towers and down into the consumer market.
Let us know what you think needs to be done to grow the use of smartphones in the 1SRC forums.
