IDC: 2010 at the halfway point

IDC ramon llamasAs we enter into the second half of 2010, it only makes sense to take a moment and reflect back on what we've seen so far this year. Rather than focus on the business-as-usual (more smartphones, more quick-messsaging devices, etc.), I'm focusing on the stories that made an impact on the U.S. mobile phone market. In no particular order, here's what I came up with:

  • Google's debuts Nexus One. Calling it a "superphone" instead of a smartphone, Google launched its Nexus One in January. Its distribution strategy challenged the status quo of having to go through a carrier or retail channel and instead go online to purchase the device. Ambitious? Yes. But this strategy, along with the lack of adequate support, ultimately proved to be its undoing. By itself, the Nexus One is a solid device, made all the more attractive by being the first to receive the latest Android updates. Still, no matter how compelling a device is, users want to handle and interact with their device prior to purchase.
  • HP acquires Palm. Following a series of marketing missteps, low sell-through volumes and a danger of going bankrupt, Palm CEO Jon Rubinstein sought bids for the company less than one year after launching its highly-anticipated webOS. HP answered the call in April to the tune of $1.2 billion. Since then, HP has announced plans to leverage the webOS into a myriad of devices (webOS on printers, anyone?). From a smartphone perspective, I fully expect more webOS smartphones to come to market, however I have to wonder how HP will be able to flex its muscle to improve volumes.
  • Motorola follows through and delivers. Give credit to Motorola for the progress it has made since Sanjay Jha came on board to lead the Mobile Devices unit. Under his watch, the company has delivered a portfolio of Android smartphones on time, announced a firm time frame for Mobile Devices and Home Networks to separate from Motorola, and is setting the groundwork for smartphones to represent more and more of its quarterly mobile phone shipments going forward. This process has not been without its challenges, but it does provide a roadmap for other companies with feature-phone heavy portfolios to consider when charting their own futures.
  • Apple's annual launch party. I was talking to the last person waiting in line 12 hours to buy the Apple iPhone 4 on launch day. When asked why he was there (he did not reserve a unit), he smiled and said, "Apple tells me what I need and how much I'm going to have to pay for it." I suppose he can add "how to hold an iPhone 4 correctly" to that list now. That Apple has built a loyal fan base is no surprise, but look to other platforms with developing fan bases. Android is quickly building a following, and so-called "CrackBerry" users have been around long before the iPhone arrived. And their numbers are still growing.

Reaching the halfway point of the year also gives me a chance to look forward to what is coming up next. Here's what I'm looking forward to the most:

  • The old OS regime strikes back. Smartphone pioneers BlackBerry, Symbian and Windows Mobile are all slated to launch refreshed versions of their respective operating systems. Is it too late? I don't think so. But whatever is coming out next must at least be on par with what is already out there, or better yet, even a few steps ahead. No one wants to see an OS that would have been great a year ago!
  • Larger displays. Remember when the first iPhone elicited all the "oohs" and "ahhs" about the size of its 3.5" screen? It hasn't changed since then, and even the latest version kept the same screen size even as it became thinner. Meanwhile, other vendors have pushed the envelope: HTC's Evo and HD2 deliver 4.3" screens, and Motorola's Droid X features the same. Are the devices too big to hold? Perhaps for some, but large-screen devices are ideal for browsing the web, watching videos, playing games and running applications. At the very least, expect more large-display smartphones, and don't rule out the possibility of even larger screens later on.
  • Faster networks and faster devices. Unfortunately, I don't live in a part of the country where 4G connectivity is currently available. But I soon will be, according to Sprint's roadmap of anticipated 4G launches. Boston joins ten other cities that will have Sprint's 4G service in the near future, and I anticipate that the HTC Evo won't be the only device (other than modems and mobile hotspots) available. Add on top of that the anticipated launch of LTE at MetroPCS later this year, we'll have a precursor of what to expect from Verizon Wireless next year. But it's not just the speed I'm excited about: it's the experiences of watching movies and browsing the Internet, and devices with more horsepower and memory to keep up.
  • New smartphone debuts. I'm bending the rules a bit on this one since I promised I wouldn't talk about more smartphones coming to the market. That's a given. But what I am anticipating is the smartphone debut of two companies that have not had a smartphone presence in the past: Dell and Kyocera. Both companies will launch devices running on Android and featuring their own take of what the Android experience can be. Welcome to the party, Dell and Kyocera. Now let's see how you differentiate yourselves in an increasingly crowded market.

I know I've omitted some stories from this list, both in my retrospective and prospective. Feel free to chime in with yours, or your reaction to any of the above I've listed. Until then, let's circle back in December to see how 2010 shaped up, and what 2011 is going to look like.

Ramon Llamas is a senior research analyst with IDC's Mobile Devices Technology and Trends team. In his role, Llamas tracks the quarterly results of the leading and emerging mobile device vendors, and uses the data to forecast the short-term and long-term direction of the mobile device market, and how it affects handset vendors, carriers and customers. He recently released his worldwide mobile phone and smartphone 2010 - 2014 forecasts, as well as a worldwide forecast of the mobile phone touchscreen market. In addition to being featured in FierceWireless, Llamas has been featured on Bloomberg Radio, National Public Radio, and quoted in Investors Business Daily, the New York Times, and the Wall Street Journal. Llamas can be reached at [email protected].