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Smartphone shakeout looms

india Updated: May 02, 2010 22:36 IST
N Madhavan
N Madhavan
Hindustan Times
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It was one hell of a smartphone week, with news from all over suggesting a tumultuous year ahead. I am not surprised.At the risk of being repetitive, I keep saying that it is actually a computer with a SIM card in it. I say so because the implications are significant.

As smartphones or Internet-friendly phones under Rs. 5,000 from little known brands such as Inq, Max, Karbonn catch on, industry leader Nokia has been bravely talking about quality and service.

But hey, it is not just from cheap brands alone that Nokia faces a tough call.

Apple’s iPhone, besides Research In Motion’s BlackBerry in a wide new rage have been big Nokia-busters. And last week, Hewlett-Packard (HP) said it would pay $1.2 billion (Rs.5,400 crore) to buy Palm Inc – which made the term palmtop computer oh-so-famous. The ailing Palm may well give HP a much-needed, while Korean giants LG and Samung have their own pitch. Google’s Android platform-based phones are also catching on. Nokia should be worried. It does not help that Taiwanese PC maker Acer announced that it plans four new smartphones this year.

Nokia’s shareholders, who are due to meet this week, are restive because it has not produced a hit smartphone since 2006 and its share price is languishing.

In India, Nokia announced smart handsets in the sub-Rs. 6,000 range, acknowledging the price pinch even as it expanded its music download service for Indian customers.

Nokia is trying to sell music, not a powerphone, if you look hard enough.

Meanwhile, research firm Strategy Analytics said smartphone shipments surged 50 percent to 54 million in the January-March quarter from a year ago, with its strongest growth in three years.

With the market crowded, manufacturers must think of new ways to keep customers engaged with their brands.

Partnerships with telecom operators and content players for bundled deals can help smartphone makers keep customers. In fact, like credit cards, co- smartphones co-branded with service providers or content players are bound to catch on.

With the focus shifting to what you can do with the machine, I expect independent online stores for content and software to level the market sooner than later. A smartphone shakeout seems inevitable.