Analyst Angle: Apple, Amazon, Google, Intel, Microsoft and RIM: The future of your ever-smarter cellphone

Editor’s Note: Welcome to our weekly feature, Analyst Angle. We’ve collected a group of the industry’s leading analysts to give their outlook on the hot topics in the wireless industry. In the coming weeks look for columns from Current Analysis’ Peter Jarich, NPD Group’s Ross Rubin, and more.
There is little doubt that the future of the cellphone will be significantly impacted by what Apple, Google and Microsoft bring to market. Apple leads in design and has what appears to be the most desirable product currently in the market, Google is working to change how you pay for phones and is attempting to drive the price for these devices down and Web utility up at the same time, and Microsoft gets infrastructure and partners with what remains the most comprehensive offering on the planet.
While it is generally more fun to talk about competitors and how they compete with each other, these three companies collectively will be driving a massive change. If we focus on any one, or just the competitive dynamic, we’ll miss the collective power of these three companies and it is that dynamic that will have a larger impact on our future. This is because each of these firms will respond to the competitive risks represented by the other and, while not intentionally collaborative, the result might actually advance more quickly than if the three companies had actually worked together. (It is generally easier to drive a company to change by competitive threat than it is to drive it to change through alliances, partnerships and industry organizations, fear is a wonderful motivator).
What will the future smartphone solution look like?
Physical design is being driven right now by a combination of RIM and Apple: Apple’s products are more attractive, RIM’s are more useful, and the future phone will be a successful blend of both. This means thin, sexy but with a keyboard and my own expectation that flexible displays will eventually play a very big roll here. Apple has figured out accessories are important to both revenue and customer retention, suggesting this will spread to others and we’ll see more commonality within cellphone company lines and between those that use the same platforms (Android, Microsoft etc.). We add the initial success of the Sync (Microsoft/Ford) service and accelerate wireless connectivity and vastly improved integration with other things (like cars).
Microsoft and RIM bring forward the requirements to connect to a robust back end, and Apple and Amazon (Kindle) the idea that the resulting solution needs to be seamless. With these future smartphones you may not be able to tell whether you are running on-line or locally. Banking, eCommerce, communications and entertainment will increasingly be a blend of local and remote running applications where the user simply won’t know or care where the code is actually running.
Intel, with their Silverthorne platform, brings a level of hardware and software commonality to cellphones which so far has only existed in personal computers. This shifts a massive amount of effort from getting things to work on different handsets to improving user interfaces, enriching features and creating a vastly improved and uncompromising web experience.
Google and Amazon (Kindle) contribute to the idea of additional subsidies. The Amazon Kindle comes with free WAN support, something that was before it existed, just theorized. Google is focused on the cost of the device, as well as the service, and running on a broader model with an even greater ability to generate offsetting financial benefits. This suggests that future phones in this class will drop dramatically in price and in service cost making them vastly more attractive to a much wider audience.
The future smartphone
Netting this out we get a phone costing (with subsidies) under $100 to purchase and near free in service costs (this last is the big change for most). It will have a keyboard and an ever larger display while remaining generally on a diet (with the viability of flexible displays and fuel cells likely being gating factors). Much improved interoperability, probably wireless (Sync like) rather than physical plugs (except for power, though wireless power is being worked, for accessories, and a massive increase in consistent blended client/web based applications. With all of this the phones will become much easier to use, largely because the difficult ones will drive themselves out of the market. And because much of this won’t work reliably if the device isn’t secure, they will be much more secure. This change will take about 3 years to complete, at that time you’ll have to ask yourself if you really need a laptop.
Questions or comments about this column? Please e-mail Rob at renderle@enderlegroup.com or RCR Wireless News at rcrwebhelp@crain.com.