AT&T: Smartphones Will Dominate by 2014

Speaking at a Symbian Partner Event AT&T executive Roger Smith said that he saw smartphones as being the dominant kind of mobile device connecting to AT&T's network by 2014. He also said that AT&T may use a single OS for "AT&T branded" smartphones (as opposed to the iPhone or RIM devices) in the coming years. He added that Symbian may be that OS, according to a report from IDG News.

Java is also losing as a platform for AT&T phones. Smith expressed disappointment in Java as having contributed to fragmentation rather than simplifying mobile development. 

What this piece reinforces is that the market will be dominated by smartphones in the next 5-7 years (more than 50%). Smartphone costs have now come down to under $200 (with subsidies) and a questionable rumor even has it that Apple may sell a $99 4GB iPhone through Wal-Mart. Whether or not the rumor is true, the more important point is that prices are coming down. Wal-Mart is selling the T-Mobile G1 for $150. 

As Americans and Europeans replace their (feature) phones, which is now happening with greater frequency, more of them will want access to the mobile Internet and will opt for smartphones, which constitute about 14% (ish) of the US handset market today. Smartphone adoption will boost mobile Internet adoption, usage frequency and mobile ad revenues. 

Indeed, Smith said that AT&T would look to advertising revenues and transaction fees in the future, rather than just voice and data revenues. According to IDG: 

But as the economy sags and subscriber growth in the U.S. slows, carriers can't keep relying on pulling more revenue out of subscribers to pay for it, [Smith] said. AT&T will push for many more advertising-based services over the next year or two, he said. Other possibilities include mobile banking and shopping services that generate transaction fees, and business-to-consumer or business-to-business applications in areas such as health care or transportation.

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Related: In the US, the Symbian OS and Nokia face a difficult, uphill battle