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Will the iPhone Change the Smartphone Market?

Estimates of iPhone shipment volumes in the first weekend they were available have ranged from 140 thousand units to 500 thousand units depending upon who was asked. Meanwhile, ABI Research forecasts that the smartphone market segment will grow from 218 million units in 2007 to 426 million units in 2012.

Now that we have a little distance from the launch, it’s time to ask: “Will the iPhone change the smartphone market?”

According to Stuart Carlaw, wireless research director at ABI Research, the answer is a qualified “yes.”

“The iPhone will not revolutionize the smartphone market,” he says, “but it is a significant evolutionary step forward. As was pointed out once its specifications were made public, the iPhone is not cutting-edge telecommunications. Where it is radical – in its user-interface and functionality – it will certainly change forever the way handset manufacturers think about their design philosophies. And from the commercial point of view, it is significant in the way it assembles its offerings in a completely integrated, brand-heavy package.”

Certain technologies critical to the interface are likely to receive greater attention as a result of the iPhone, particularly touch-screens, which will become more sensitive, and accelerometers, which the iPhone uses to orient its displays and active/deactivate controls depending on how the handset is held.

Carlaw adds that, “The iPhone’s effect on the market will be similar to that of Motorola’s RAZR It will spawn a number of look-and-feel-alikes and will be seen as a benchmark for future design. One thing for certain is that the product is not intended to be an enterprise device, so its impact will be most keenly felt in the high-tier feature phone market and in the emerging prosumer market segment.

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ABI Research’s latest smartphone report, “Smartphones and the OS Market” (http://www.abiresearch.com/products/market_research/Smartphones), identifies the key drivers, barriers and the latest trends influencing the market for smartphones. It assesses the high-level business and technology issues for the smartphone market, and recommends steps that handset vendors, OS vendors, and mobile operators can take to increase smartphone adoption. It forms part of the firm’s Mobile Devices Research Service (http://www.abiresearch.com/products/service/Mobile_Devices_Research_Service).

Founded in 1990 and headquartered in New York, ABI Research maintains global operations supporting annual research programs, intelligence services and market reports in broadband and multimedia, RFID & contactless, M2M, wireless connectivity, mobile wireless, transportation, and emerging technologies. For information visit http://www.abiresearch.com, or call +1.516.624.2500.

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