Is the feature phone dead?

SAN FRANCISCO--With consumers quickly migrating from feature phones to smartphones, should device makers continue to make feature phones? This was a hot-button issue at a panel discussion at the Open Mobile Summit here.

Manufacturers such as Sony Ericsson have decided to focus exclusively on smartphones. According to Jan Uddenfeldt, Sony Ericsson CTO, 90 percent of the company's sales are smartphones. "We have left feature phones behind us," Uddenfeldt said.  

But not everyone agrees with that strategy. "I don't think the feature phone is in the past," said Lixen Cheng, CEO of ZTE USA, noting that while 30 percent to 40 percent of consumers have migrated to smartphones there are still 60 percent of pepole that still own a feature phone. "That's a tremendous segment," Cheng said. "And many want to stay with a feature phone because they are comfortable with a keypad."  

He added that ZTE is actually taking market share away from other OEMs because the company is still addressing the feature phone market. According to market research firm IDC, in the third quarter ZTE was the world's No. 4 handset maker with 19.1 million units and 4.9 percent of the global market.

Cheng added that U.S. operators still want feature phones for their customers and have rate plans structured for feature phone users. Cheng said that ZTE is planning to launch a feature phone "with a smartphone-like experience" in conjunction with a U.S. operator on Nov. 25, or Black Friday.

Kevin Packingham, executive vice president at Samsung, agrees that there is still a lifespan for the feature phone. "The feature phone still has a use-case that is valuable for the emerging market," he said. "You could have a low-end device that does five or six apps really well."

But some believe that the future of the feature phone largely rests on the operator. Jinsung Choi, senior vice president at LG, predicted inexpensive smartphones will help drive smartphone sales deeper into markets. However, he said that rate plans will play a big role as cost-conscious consumers may not want to pay for the additional data plan that is required with smartphones. He also noted that many operators are spending all their marketing money on smartphones, and may even stop subsidizing feature phones to encourage users to migrate more quickly to smartphones.

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