Page last updated at 07:38 GMT, Thursday, 15 October 2009 08:38 UK

Battle of the smartphones begins

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Rory Cellan-Jones asks Palm and O2's bosses how they plan to carve a niche for the new phone in a crowded touch screen market.

Smartphones are going mass market, fuelled by the public's "insatiable appetite" for social media, analysts say.

They predict an explosion in sales alongside price falls for smart handsets next year.

It comes in a week which sees the launch of Blackberry's latest handset, the Storm 2.

Meanwhile the Palm Pre, dubbed an "iPhone killer" finally makes its UK debut.

Despite the recession the market for high-end phones is buoyant.

"The mobile internet is at the same stage as the internet was in 1998," said Ian Fogg, an analyst with research firm Forrester.

Ben Wood, an analyst with CCS Insight, agrees.

"We are on the cusp of an explosion of computer-like devices in the hands of consumers where previously they were the preserve of the early adopter," he said.

"Social networks are the fuel propelling the momentum," he added.

Increasingly mobile operators and handset manufacturers are providing phones that are "a one-stop shop for social messaging whether that be Twitter alerts, instant messages or the latest pictures on Facebook," said Mr Wood.

It could be time to drop the label "smartphone" thinks Mr Fogg.

"Most handset makers are looking to add internet capabilities to their ranges. It is no longer about whether a phone can access the internet but how well," he said.

New markets

Blackberry Storm 2
Blackberry offers improved typing

Nothing illustrates the rise of the smartphone into the mainstream better than the the story of Blackberry.

RIM (Research in Motion), the company behind the Blackberry family, has transformed itself in recent years, with a range of handsets reaching far beyond its original corporate demographic.

Its Curve series has become one of the fastest selling smartphones on the market.

In August 2009, RIM announced that it had sold 65 million Blackberry smartphones worldwide.

But it has yet to corner the apps market in the same way as Apple's iPhone has. While developers have written around 85,000 applications for the iPhone, there are only around 2,000 for Blackberrys.

The Blackberry Storm 2 is released on 15 October and addresses some of the issues of the original handset. It sees new touchscreen technology to improve the typing experience and make it more like using a traditional keyboard.

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Blackberry's Nawdesh Uppal shows off the Storm 2's new keyboard

It will be available via Vodafone, free if users buy into a £35 a month two-year contract.

iPhone killer

Palm Pre
The Palm Pre introduces a new mobile operating system

The following day sees the release of the Palm Pre in the UK, a much-anticipated device which has been in development for seven years.

It debuts its own operating system - webOS - which aims to mimic desktop operating systems.

It allows users, for instance, to switch between applications in the same way as programs are multi-tasked on a home computer.

It has been touted as an "iPhone killer" since its release in the US in June.

Figures from market research firm TNS suggest the Pre-Palm launch could outshine the debut of the iPhone in 2007.

It surveyed 1,000 UK adults and found that 27% of existing O2 customers would be "keen to buy" the Palm Pre, compared with 17% wanting the iPhone prior to launch.

It will be available via 02, to anyone signing up for a two-year £34.26 monthly contract.

For those reluctant to sign up for lengthy contracts, smartphones are currently expensive.

To get a "pay and go" version of O2's iPhone 3G, for example, will cost a hefty £342.50.

According to Forrester the prepaid market in the UK accounts for around 65% of mobile users but data tariffs for users are not as attractive as those on contracts.

For anyone on a contract, mobile internet is bundled pretty much as standard these days.

If smartphones are to go truly mass market cheaper handsets and data charging tariffs that are attractive to the pre-paid market will be essential, said Mr Wood.

"£35 a month is a lot of money to some and we predict that smartphones will be available below £100 in 2010, alongside tariff innovation," he said.



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