Optical/IP Networks

Going Pro(-sumer)

Are consumers in the United States ready to embrace smartphones with rich feature sets including mobile email, video downloads, MP3 players, and digital cameras?

That's the big bet of device makers showing their new wares at CTIA Wireless IT and Entertainment this week. A raft of new devices, including the E62 from Nokia Corp. (NYSE: NOK), the BlackBerry Pearl, and Cingular Wireless 's 3125 device [introduced today and manufactured by Taiwanese company High Tech Computer Corp. (HTC) (Taiwan: 2498)] have been showcased in Los Angeles this week, heralding a groundswell of manufacturers trying to bring traditionally enterprise-focused devices to the broader consumer and "prosumer" markets. (See Tech Roundup: CTIA Edition.)

Smartphones, said Laptop magazine editor Mark Spoonauer, who moderated the "Device Showcase" at the Smartphone Summit, which kicked off the CTIA trade show on Monday, are moving "from geek to chic."

The most heralded of these launches is the Pearl, a sleek, black, credit-card sized device that is the first device from BlackBerry to feature consumer-oriented capabilities like a built-in camera and an MP3 player. The Pearl, says RIM vice president Peter Gould, builds on BlackBerry's corporate heritage with a new form factor and new functionalities to attract a non-business market. (See Nokia, RIM & Moto: 'Prosumer' Trinity.)

"We're moving into these new burgeoning marketplaces, the consumer and prosumer markets," acknowledges Gould. "But the Pearl remains at heart absolutely a BlackBerry."

"I think they nailed it," says Gartner Inc. senior analyst Todd Kort of BlackBerry's plunge into the ultra-competitive waters of consumer electronics. "I think it will do quite well."

Like the other new consumer-oriented smartphones, the Pearl will retail for well below its enterprise-focused counterparts. TMobile will offer the new device for $199, compared to $400 and up for traditional BlackBerries.

Even cheaper is the Nokia E62, which has garnered almost as much buzz as the Pearl at this week's show. Speaking at a media/industry luncheon at trendy downtown L.A. bistro Zucca, Kent Mathy, president of the business markets group at Cingular Wireless, which will offer the E62 in North America, repeatedly called the Nokia device a "game-changer." Cingular will offer the E62 for $149, and with discounts and rebates the device will likely be available within the next year for under $100.

"Companies that have previously distributed this type of device in a limited way can now deploy them in a much broader way," says Mathy. "And consumers who want that kind of enterprise capability, with mobile email and their contacts and so on, can now easily afford the E62."

The new consumer-oriented devices are designed to bring the U.S. market, where smartphones have been limited largely to executives and high-income professionals, in line with Europe and East Asian markets like Japan and South Korea, where smartphones have been embraced by much wider swathes of buyers. As HTC Americas vice president and general manager Todd Achilles points out, the new smartphones are attempting to bring together the portability and ease of use of mobile phones with the power and multimedia capability of laptops.

"We're trying to bring those two worlds -- mobile communications and the PC world -- together in a range of different devices," Achilles told the crowd at the Device Showcase.

Not everyone thinks this blurring of the lines between enterprise-focused devices and consumer mobile phones is such a hot idea. Many IT managers, for example, blanch at the idea of camera-equipped phones with removable memory cards being brought into corporate workspaces. That's why RIM has given IT departments the ability to shut down the camera and disable the memory card on the Pearl if corporate policy so requires.

"I don't think it's necessarily the best approach," says In-Stat principal analyst Bill Hughes. "Enterprise sales are actually growing very well, so there's not necessarily a strong rationale for introducing all these new consumer devices. And clearly there are mixed feelings [in corporate IT departments] about having these devices with consumer capabilities in the hands of mobile workers."

At any rate, the introduction of the Pearl and its rivals will have one clear result: an already cutthroat business just heated up even further.

"If you thought the smartphone market was ridiculously competitive before," says Avi Greengart, principal analyst for mobile devices at Current Analysis , "just watch."

— Richard Martin, Senior Editor, Unstrung

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