SmartPhones and Mo-Lo Search

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The WSJ (sub req’d) reports that Palm announced it wouldn’t hit its numbers “amid lower-than-expected retail sales of its Treo smartphones.” Hmmm . . . I wonder why? The %$#@ phones are so expensive — that’s why.

By contrast the “Q” is being offered at a breakthrough price point by Verizon of $199. I don’t have access to sales data at the moment but I would imagine it’s selling briskly. A lot of people want these phones. My sense is that under $200 is a price threshold that, if not exceeded, will drive considerable smartphone sales.

Every time I think about buying a Treo (I’m a Sprint customer), the $500 price tag holds me back.

Price will ultimately drive adoption of smartphones and data plans. If the stars align on these fronts then “mobile web” browsing will see a good deal of adoption. Accordingly, paid links in wireless search results will be a more meaningful revenue driver. (User experience drives ad model.)

But if prices don’t come down then we’ll be looking at smaller screens and alternative paradigms (e.g., FreeDA/voice-driven category search) as dominant in the near to medium term. Ultimately, however, you’re going to have a mix of modalities and mobile ad models in the marketplace.

There are competing forces in the market: competition putting downward pressure on prices and the resistance of carriers and handset makers to further discounting of data plans and devices.

But beyond smartphones, I think there are a bunch of interesting multi-function wireless devices that we’ll start to see.

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Related: Phones vs. Alternative Mobile Devices

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One Response to “SmartPhones and Mo-Lo Search”

  1. Howard Owens Says:

    Fortunately, I haven’t had to pay for my own Treo yet (I’ve had the 300, 600, 650 and soon the 700).

    What has been killing me the past year is Verizon’s service plan for the Treo, which is way more expensive than Sprint. I’m switching back to Sprint. It’s a better service, anyway.

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