No Palm Pre App catalog, no problem!

NEW YORK, USA: Palm Inc.'s fortunes lie in the success of its new Pre smart phone.

As it becomes available the morning of June 6 with a meager App Catalog still in "beta" stage, Pre buyers will have extremely limited access to third-party games, applications, and other software offerings.

Some major exceptions are Cellufun's browser-based games, including its recent smash-hit Ponzi scheme game, "Made Off."

Cellufun is the largest mobile virtual community in the world, where millions of people play dozens of different social games and connect with each other. The Pre's web browser will support access to Cellufun's games, mobile blogging applications and mobile commerce opportunities, making it one of the few non-Palm applications available to early adopters of this new smart phone.

"When married to the right mobile application, smart phones like the Pre allow consumers to have an engaging and fun experience for every day things like gaming, social networking, and commerce. The Pre looks to be a runaway hit for Sprint, and we believe that the millions of Pre buyers will sprint to Cellufun.com to play our social games and tell their friends about it. There is a reason why Cellufun has been a top 10 download on the BlackBerry App World since its launch. We turn smart phones like the Pre into a social and entertainment network for consumers," said Neil Edwards, CEO of Cellufun (or m.cellufun.com on mobile).

The Palm Pre is available to the public, Saturday, June 6 onward, and will be sold throughout Sprint stores across the United States.

Palm Pre stands to shake up smartphone status quo

EL SEGUNDO, USA: Palm’s new Pre smartphone holds strong potential for robust sales growth, and may have a major influence on other platforms as well as the technology supply chain, according to iSuppli Corp.

Palm Pre shipments could amount to 1.1 million units in 2009. However, if Palm quickly introduces a new Pre that supports the 3G GSM standard, sales could rise to 1.3 million during the year. Furthermore, if Palm opens up the licensing of its webOS operating system used in the Pre, the software could have a wider influence beyond the company’s own products.

“Palm’s webOS appears to be superior to the Mac OS X used in the iPhone in the crucial area of multitasking capabilities,” said Tina Teng, senior analyst, wireless communications, for iSuppli. “This key point of differentiation, combined with the product’s multi-touch display, could be enough for Palm to carve out a significant share of the smartphone market.”

Another key allure of webOS is its use of widgets for accessing data and applications like the iPhone, rather than the folders used in Microsoft’s Windows OS. The consensus among most users appears to be that widgets provide a more intuitive interface than folders.

Because of this, there may be strong demand for webOS from other smartphone makers.

“If Palm decides to license webOS to other companies, it could follow in the footsteps of Google’s Android operating system, which is expected to expand its share of global smartphone operating systems to grow by nearly a factor of 12 from 2008 to 2010 according to iSuppli’s Design Forecast Tool (DFT) for Mobile Handsets,” Teng added.

This could lay the foundation for webOS to challenge Apple’s Mac OS X for leadership in the highly intuitive smart-phone operating system market.

Minding the store
Palm could further boost the prospects of webOS if the company opens an application store that sells programs that work with the operating system, similar to Apple’s App Store.

“An application store would make Palm a more complete solution provider to its end customers, allowing it to provide not only a hardware platform and operating system but also the programs essential to take advantage of the capabilities of a smart phone,” Teng said.

Teng noted that industry rumors have circulated since the Consumer Electronics Show (CES) in January that Palm will offer an online applications catalog. With the arrival of software allowing developers to produce programs that can be compiled to work on multiple mobile operating systems, Palm’s store likely will grow rapidly to sport a large number of applications.

Battle of applications processors
The potential long-term success of the Pre promises to benefit Palm’s applications-processor semiconductor supplier, Texas Instruments Inc. (TI).

While TI remained the leading supplier of standalone media/application/graphic processing chips for mobile handsets in 2008, No.-2 Samsung Electronics Co Ltd. is closing in on the lead, according to iSuppli’s Wireless Competitive Landscaping Tool (CLT). Samsung’s share of global market revenue rose to 16.4 percent in 2008, up from 10 percent in 2007. In contrast, TI’s share declined to 16.8 percent in 2008, down from 23 percent in 2007.

“Owing to rising shipments of the iPhone, which uses Samsung’s media processing silicon, the company is closing the gap,” said Francis Sideco, senior analyst, wireless communications, for iSuppli. “Pre’s success could help TI regain some of that share as Pre sales will help boost TI’s revenue for its OMAP line. It also will validate TI’s OMAP approach by demonstrating the need for powerful standalone applications processors in high-end smartphone devices.”

The table presents iSuppli’s market share estimates of global standalone mobile phone media processors.Source: iSuppli, June 2009

Display shortage?
The Pre likely makes use of a Low-Temperature Polysilicon (LTPS) LCD display, which offers superior picture quality compared to regular TFT-LCD panels used in most mobile phones.

This could put constraints on availability of LTPS LCD supplies, which is a popular display choice in the growing smart phone marker segment.

“If the Pre is successful and large volumes are shipped in the coming years, LTPS displays could go into shortage because the supply is limited to a few suppliers that operate smaller generation fabs capable of producing them,” said Vinita Jakhanwal, principal analyst, small/medium displays, for iSuppli.

In the palm of your hand
An iSuppli preliminary cost analysis of the Palm Pre released in late April revealed a total projected Bill-of-Materials (BOM) and manufacturing cost of approximately $170 for the product.

The estimated BOM consists of a hardware cost of $138, including the battery, nearly $10 for manufacturing and basic test costs, and a software and licensing cost of $23.

iSuppli produced this estimate of the Pre’s hardware and manufacturing costs based on second-quarter component pricing and assembly pricing from the company’s Mobile Handset Cost Model. An iSuppli cross-functional team also participated in developing the virtual teardown, including experts in memory, displays, baseband, component pricing, mobile handsets and wireless connectivity.

A full, physical teardown of the Palm Pre will be released by iSuppli early next week.

Smartphones: Silver lining of declining handset market

Ovum comment from Adam Leach, Devices principal analyst.

Smartphone shipments will reach 406.7 million by 2014
UK: During 2008, in a first for the mobile industry, consumer demand for third-party applications started driving both handset sales and revenues for developers and OEMs.

Apple's success with the App Store has prompted other players to focus on devices that can enable third-party developers to easily bring applications and services to mobile phones. Subsequently the global economic downturn has stimulated a renewed focus on smartphones.

The collapse of the market for mid-tier handsets in 2009 is polarising the handset market, with vendors and mobile operators focusing on two types of handset: those targeting the low-end and high-end segments. The end result is a quickening of the replacement of 2G in favour of the high-end 3G handsets, and greater volumes of smartphones.

Ovum expects that these factors will see smartphone shipments grow by 18.7 percent between 2008 and 2009 despite the overall decline during the same period in the total mobile phone market. This growth will continue at a CAGR of 19.5 percent through to 2014, at which point smartphones will account for 29 percent of the total global handset market.

Symbian remains market leader, Google Android rising star
In 2008 Symbian OS represented 58 percent of the smartphone market. Its position as market leader has been achieved by Nokia's championing of the platform and its widespread use within the player's device portfolio. Following Nokia's acquisition of Symbian and creation of the Symbian Foundation, Nokia will continue to be an active supporter and drive the platform deeper into its portfolio.

Ovum expects Symbian OS market share will drop to 43 percent by 2014 due to rapid adoption of new platforms such as Android, although it will maintain its market leadership. From a standing start in 2008, adoption of Android will be rapid and we expect Android shipments to reach 72 million units by 2014, representing 18 percent of the market and overtaking shipments of Windows Mobile.

Android shipments will be driven by adoption by all tier-one OEMs (except Nokia) and an active developer community.

Smartphones are dead! Long live managed device platforms
While smartphones are set to proliferate over the next three to five years, the category itself will become less relevant as attention shifts towards distinguishing those devices that are actively managed by OEMs, MNOs, web companies and retailers from those that aren't.

Consumers will increasingly make buying decisions based not on a device's potential to support advanced capabilities but 'crucially' on the vendor managing their data and services on the device.

The ability to deliver a tightly integrated end-to-end service proposition including content and applications directly to consumers was pioneered by Apple and Google. Ovum describes this approach as a managed device platform (MDP), as examined in our report: "Of iPhones and Androids: redefining the smartphone and other devices."

The adoption of the MDP model by Nokia, Google, Microsoft, Sony and other major vendors will drive the adoption of those smartphone software platforms that are backed by these companies.

'Unmanaged' smartphones will still have a place in the market. However, they will appeal mainly to users who do not wish to be tied to a particular vendor's offering or are content with a more basic service package. Smartphone platforms that do not have the backing of major vendors will not ship in significant volume in five years' time.

Defining the smartphone market
Ovum defines a smartphone based on its software platform. Therefore, Ovum considers the following to be smartphone platforms: Symbian OS, Windows Mobile, Android, OS X, BlackBerry OS, Palm OS, Web OS and LiMo.