The Transition from Handset to Smartphone to Smartbook

According to reports from Nokia (NOK), IDC and iSuppli, the mobile phone market will shrink in 2009. Shipments aren't predicted to surpass the levels of 2008 until 2011, according to iSuppli. This phenomena has occurred only once before in 2001, year of the tech bubble bursting. This change can't be assigned only to an economic slowdown. With a current world handset market of 1.22 billion per year and an estimated 6.7 billion world population, the mobile phone market is becoming saturated.

Going forward, attracting customers to replace mobile phones is key, and requires more capable and feature-rich phones. This will accelerate the trend towards smartphones, which have the capacity to offer users more and more of the internet and media experiences that PCs are currently used for.

Smartphones which can utilize the display of TVs and other devices, may further supplant some of the usage (or need) for PCs. Also as consumers familiarize with the UI and environments of smartphones, the door is opened for the migration of smartphone environments to larger devices, for example netbooks. Google's Android is poised to be a strong contender in this latter trend, already having a basic x86 netbook port and picking up many new power-hitter members in it's Open Handset Alliance. Note that some of these players manufacture PCs.

Look for a transition from the shrink wrapped software model to the online app-store model, examplified by the iPhone (AAPL) app store or Android (GOOG) market. A smartphone alone, or a smartphone plus netbook will become more the focus of our computer lifestyles. Some new consumers will enter the trend, never buying a PC in the conventional sense.

While 3G and more advanced data services help smartphones gain traction as tomorrow's computing device, WiFi has enabled smartphones to be a first class computing citizen. WiFi usage from smartphones has increased sharply and will continue to do so. Look for WiFi support on lots of electronic devices.

The transition from handset to smartphone is obvious, but how many of the related vendors are paying attention to the smartphone to smartbook transition and relationship? I believe answering that will be an indicator of who floats to the top.

Disclosure: no positions

Comments

[Timeline St...:]

Examplified....that's a great new word.

I prefer 'exampletated' myself.

2008 Dec 22 08:08 AM

[Anthony Dad...:]

There should be a big transition to netbooks and smartbooks. I think there is a market for both smart phones and netbooks. There are times you want to write a quick email on your smartphone or read a headline story. And there are times you want to spend an hour or so reading or writing and the comfort of a large keyboard is essential.

2008 Dec 22 08:25 AM

[howmany:]

There are two parallel transitions, with the destination all being a type of smartphone and a future slightly larger smartphone (but much smaller than a netbook). The netbook will eventually be seen as large and clunky compared to the always always always with you smartphone. Only 'special operations' will require the book, and once we make the mental transitions, they will seen less often.

2008 Dec 22 08:31 AM

[Alpha Male:]

Agreed on the transition towards portable WiFi devices. Which companies do you think will benefit from this transition other than the obvious (AAPL,RIMM,NOK)?

How about the companies that will be building the tiny WiFi/3G chips/cards needed to power all this connectivity?

2008 Dec 22 12:31 PM