2010 to be 'year of conflict' in mobile

IDG News Service - Despite a lagging economy that continues to drag down the market, 2010 promises to be an exciting year in mobile, analysts say.

"2010 will be a year of conflict," said David Eller, an analyst with TownHall Investment Research.

Eller and others made a range of predictions for 2010 about subjects including the iPhone's dominance, Palm's likelihood to survive and whether the market will see a trend toward unsubsidized phones next year. They don't always agree on what the coming year will bring.

While Eller expects to see the bulk of smartphone sales going to the top four handset manufacturers, making it increasingly challenging for new entrants, others think it's still an open game.

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Eller noted that in 2007, the top four smartphone makers sold about 65% of the phones, according to Gartner. By next year, TownHall expects the top four will account for nearly 90% of smartphone sales, leaving only 10% for other manufacturers and new entrants. The top four will be Nokia, Research In Motion, Apple and HTC, TownHall predicts.

But another expert said that recent history shows that new companies have a chance at succeeding in mobile. "One thing we've seen is how quickly things change," said Michael Gartenberg, an analyst with Interpret. "Three years ago if you were talking about companies to watch in mobile, you wouldn't have discussed Apple or Google. Three years later, they're probably two of the most important companies to keep an eye on in 2010."

While Palm has been around for many years, its recent struggles make its position in the top line up of mobile phone makers uncertain. "I think Palm is gone," said Caroline Gabriel, an analyst with Rethink Research. "Palm is living on borrowed time. I see no reason for them to survive long term."

But there's still hope for Palm from some corners. "They're executing in very narrow straits, but they're hitting the mark and staying relevant and capturing, if not significant market share, tremendous mindshare," said Gartenberg.

"Palm's going to have a really good year," predicts Jonathan Goldberg, an analyst at Deutsche Bank who covers Palm.

Android and Windows Mobile are wild cards for 2010, with few analysts willing to predict much about either operating system. While Android has good momentum with many new phones hitting the market, onlookers worry about Google's long-term commitment to the platform and about how fragmentation may affect the platform's potential for growth.

Despite its rapid loss of market share, Windows Mobile is a dark horse that could surprise the market with an updated operating system, Gartenberg said. Goldberg agreed: "Don't count them out yet."