Smartphones

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As Smartphones Proliferate, Will One Company Emerge as the Clear Market
Winner?

Just as computer operating systems vied for dominance
back in the late 1970s and early 1980s, smartphones thesedays are jostling for market share, hoping that their mix of
capabilities -- ranging from web surfing to email to
calendar management -- will ensure them a critical mass of
customers. The makers ofmobile devices such as the
BlackBerry, iPhone and Treo are all scrambling for
position in case this race turns out like the previous one
when a single company -- Microsoft -- ended up the
dominantplayer.
Indeed, more than 80% of the desktop and notebook
computers in the world run Microsoft's Windows operating
system, giving the company tremendous market power over both software developersand computer
makers.
As is usually the case when the competition gets fierce, consumers are reaping the benefits: The
smartphone marketplace is full of increasingly clever devices offered atsteadily falling prices. Yet, at the
same time, the tight integration between the cellular networks, device manufacturers and operating system
vendors also serves to limit consumer choice. Want an AppleiPhone in the U.S.? You'll need to select
AT&T for your cellular service. Interested in Palm's forthcoming Pre? You'll have to switch your service
to Sprint.
All of this comes at a time when manyconsumers use their smartphones as if they were tiny PCs. The
palm-sized devices "are becoming more like laptops," notes Gerald Faulhaber, a business and public
policy professor at Wharton. AddsWharton operations and information management professor Karl T.
Ulrich, "I know several people who run their lives on smartphones, including viewing documents and
accessing the web."
According toresearch firm IDC, while mobile phone shipments overall fell 15.8% worldwide in the first
three months of 2009, the smartphone segment of those shipments gained 4% -- even in a declining
economy....
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