Smartphone Buyer's Guide

In the bygone age of the PDA, getting e-mail by BlackBerry was the mark of business cool. In the emerging smartphone society, cool will be not having to carry a laptop at all. Newer device models from Motorola, Nokia, Palm, Research In Motion, and others cram access to e-mail, the Web, and ever-more business apps and company intranets in with the look and function of a cell phone. Never mind the annoyingly tiny screen and short battery life. With starting prices of around $200, trust us, everyone's going to want one of these. So IT had better be on top of the issues, from which phones make the most sense to the management problems they create. What follows is a buyer's guide, laying out the top smartphone vendors' strategies, strengths, and weaknesses. (See "Smartphones Fall Short In Several Areas" for how IT departments are getting more applications on smartphones.)

The smartphone market is booming. In the first half of this year, 38.5 million were shipped worldwide, up 75% from the same period last year. More than 200 million smartphones will ship annually by 2009, In-Stat predicts. Businesses and individuals are buying them, and smartphone makers are blurring the line, pitching their products as "prosumer" devices for both work and personal use.

That's another reason IT managers must pay attention to smartphone growth. Imagine employees bringing devices of all makes and models--yet few security features--into the business to access company e-mail and business apps. Consulting firm Booz Allen Hamilton gives BlackBerrys to senior-level employees, letting them submit time sheets from the road, but those who buy smartphones on their own don't have such privileges. For one thing, they lack the security features that Booz Allen had RIM include with the company-bought phones, says Daniel Gasparro, senior director and chief technologist at the company.

Yet IT teams must recognize that a smartphone is more a personal tool than a PC, or even a laptop, and consider that in the buying process. Brian Lunde, IS manager at LifeSource, a nonprofit organization that links organ and tissue donors with transplant recipients, let employees try out Palm Treos and BlackBerrys and discovered they liked the BlackBerry's functionality better. "Sometimes you want to be impersonal and say, 'It's corporate'--stack them up and have people come in and grab them," Lunde says. He knew that wouldn't work with smartphones. "We still have to listen to the cry of our end users," Lunde says.

So here are the options to consider.

RIM: THE ONE TO BEAT
The smartphone market is confusing. A variety of cell phones offer smartphone capabilities, but many are more geared to helping teens share videos and snap photos than helping employees do their jobs. Sometimes smartphones are called PDAs--increasingly, there's less to differentiate the three device categories. To us, a smartphone lets you do e-mail, Web computing, make calls, and in some instances, run mobile applications. RIM was the pioneer with its business e-mail, and it's still the one to be beat, at least in the United States.

RIM, which introduced the BlackBerry PDA in 1999, supplied 53% of the 5.2 million smartphones shipped in the United States last year, followed by Palm with 31%, IDC says. Nokia had 5% of the market, and Samsung 3%. Motorola, No. 2 in market share for cell phones, has gotten serious about smartphones only recently. Smartphone vendors are constantly trying to leap frog one another with new models, features, and designs--RIM alone released 10 handset models this year.

IDC predicts 8 million smartphones will ship in the United States this year, up 54% from 2005. The U.S. market is markedly different from the global one. Devices such as Nokia's that ship with the Symbian OS dominate the global smartphone market--it has 67% market share worldwide--but trail in the States. The opposite is true of RIM, which ships half the smartphones in the United States but just 6% worldwide.

Can RIM hold its U.S. lead? Motorola and Nokia are charging hard with sleek, ergonomic cell phone designs. RIM has responded with its new BlackBerry Pearl and BlackBerry 7130g prosumer devices that are smaller and more phonelike than previous models.

The traditional cell phone vendors must compete with RIM's reputation as a one-stop, full-service business provider that also offers server software, security features, and wireless "push" e-mail (meaning users don't have to sync up their devices with servers to get new messages; they're automatically delivered).

RIM plans to keep its lead through product innovation, co-CEO Jim Balsillie says. One example is the BlackBerry 8700c, packing an Intel XScale processor with speeds of up to 312 MHz, which debuted last November on Cingular's high-speed Edge cellular network and transmits data up to 135 Kbps.

The biggest threat to RIM is the Windows Mobile operating system, now on some smartphone models from Cingular, Hewlett-Packard, Motorola, Palm, Sprint, and others. Windows Mobile is less of a hassle than the BlackBerry operating system to integrate into Windows computing environments. RIM is aware of the risks of proprietary technology. One attempt to open up is its BlackBerry Connect, a service that lets Motorola, Nokia, and Palm smartphones receive BlackBerry push e-mail. RIM may have a hard time keeping up with all the new phones; it hasn't yet extended BlackBerry Connect to the Motorola Moto Q and the latest Palm Treos.

PALM: LOTS OF CHOICE

Palm's trying to position itself for the next big bang in business wireless: mobile applications beyond e-mail. It's focusing on helping companies meet the considerable challenges of developing and deploying mobile apps. "Many of our business customers aren't ready to give up their laptops, but they're leaving them behind for short trips or day trips and using Treos instead," says Tara Griffin, Palm's VP of enterprise markets. The company last month formed the Palm Developer Network, which replaces its PluggedIn developer program and includes both Palm OS and Windows Mobile developers. The program offers technical, business, and marketing support, including an online library to answer developers' questions and compatibility testing services.

Palm sold 569,000 smartphones worldwide in its first fiscal quarter ended Sept. 1, up 21% from the comparable quarter last year. But that's slower than the market is growing, as Palm loses share to Motorola, Nokia, and others in the prosumer smartphone market. Even as the market grew by nearly 80% in the first half of 2006, according to Gartner, Palm's smartphone unit sales in the first quarter were up just 8% over the preceding quarter. The company has added higher-resolution screens and EV-DO modems to its devices, but it's done little innovation in form factor or functionality, says Avi Greengart, an analyst at Current Analysis.

Palm's recent adoption of Windows Mobile on some Treos could boost its market position. Microsoft says there already are some 20,000 applications for its platform.

NOKIA: THE FUTURE KNOCKS

Nokia also works with Avaya to allow businesses to connect Nokia smartphones with Avaya voice-over-IP PBXs. Using dual-mode phones with Session Initiation Protocol capabilities, users can make and receive calls over both cellular networks and WLANs on and off campus. "The idea is to have one device that's a productivity tool whether you're at your desk or in your car," McDowell says. Nokia plans to roll out a similar capability with Cisco Systems later this year.

Nokia's E62 uses Cingular's Edge network. With download speeds of up to 135 Kbps and upload speeds of up to 32 Kbps, the service is suitable for Web browsing but still falls short of cable or DSL. Cingular is catching up to Sprint's and Verizon Wireless' EV-DO networks, which offer download speeds of between 400 and 700 Kbps and upload speeds of 50 to 70 Kbps, by rolling out its next-generation HSDPA network in select geographic areas, at speeds of about 1 Mbps.

MOTOROLA: NEW KID IN TOWN

Motorola is focusing much of its energy on getting more developers to build applications for Windows Mobile, Hawver says. It recently launched Fast Track Center, a Web site that gives developers access to business and product development services offered by Motorola and its partners. The program includes discounts on hardware, software, and peripherals used for development. In July, Motorola created a company called CanvasM to develop custom wireless business applications and help companies implement apps and related services. The company is a joint venture with Tech Mahindra, a services company in India, partly owned by British Telecom, that specializes in telecommunications.

Motorola provides Moto Q users with resources such as the Everything Q Wiki and Moto Q forums for sharing experiences and suggesting changes. The Moto Q has room for improvement. At Lowe Enterprises, a commercial real estate management company, managers have to reboot their Moto Q's almost daily because Windows Mobile tends to lock up, CIO Rocco Belmonte says. Additionally, device memory gets used up by programs that run simultaneously, often causing memory leaks, he says. Battery life also has been a problem. "We had more hardware and battery failures with the Q than is acceptable," adds Mike Thomas, a desktop support manager at Lowe Enterprises. Thomas is working with Verizon Wireless to tally the number of units the company has had to return, which he says has been high.

Still, the Moto Q beat other smartphones that Lowe Enterprises evaluated. The BlackBerry was bulky, and the Treo 700w's screen was too sensitive. "The Moto Q has a great form factor and is sufficient for our people, who mostly need a phone and wireless e-mail," Belmonte says.

At $200, the Moto Q is cheaper than most BlackBerrys. But it lags on security and management capabilities, according to Gartner. Without embedded IT support features, the Moto Q is a tough sell to businesses and is more likely to appeal to individuals looking to save a buck. But there's more coming: A few months ago Motorola created a group within its mobile device unit that will focus on developing business-oriented smartphones.

THE OTHERS

Hewlett-Packard is known for its notebook computers, but the vendor is getting more serious about its smartphone offerings. In February, it created a business unit for handhelds separate from notebooks. Its newest iPaq smartphones, the 6900 series, come with an updated version of Windows Mobile and business productivity software. The iPaq hw6920, announced last week, offers GPS navigation, TeleNav directions, and Wi-Fi. With established leaders and flashy newcomers, HP must keep the new products coming--and tap its business ties as the PC market-share leader--to make a splash in the U.S. smartphone market.

ANOTHER OPTION: WAIT

But don't bank on being able to wait on a major smartphone rollout at your company. From sales reps to field technicians to executive types, your colleagues are ready to take what they can get. In the smartphone society, IT had better be ready to give them the best option they can.

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Smartphones Fall Short In Several Areas

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Smartphones: How They Stack Up

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5 Steps To Getting A Handle On The Smartphone Explosion

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Mobile Devices Are Ready To Take Their Place Along PCs In Businesses