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With Apple's (Nasdaq: AAPL) recent announcement of its new lower-priced and more richly featured 3G iPhone, smartphones are once again in the news. Now the iPhone will be competing with other prominent smartphone systems, particularly Research In Motion's (Nasdaq: RIMM) popular BlackBerry.
Many consumers might not have ever thought, however, about the fact that their smartphones have operating systems. Like a computer, a smartphone has a system that shapes the workings of the phone, the applications it can support, and the interactivity it has. Unlike PCs, however, which are dominated by one operating system -- Microsoft's (Nasdaq: MSFT) -- smartphones are part of an entirely different realm of competition and innovation regarding both operating systems and applications.
"What you're seeing with smartphones is that the companies aren't willing to release their proprietary differentiation," said Michael Mace, a principal at Rubicon Consulting, a Silicon Valley-based company that advises tech companies on strategy 
and marketing . "They're really careful to hang onto that stuff. That causes the market to be fragmented."
That fragmentation can be seen as both negative and positive. Negative because it means there isn't a single, simple platform that consumers can rely on. Positive, however, because it means that consumers have more choices, and there's more creative innovation in the smartphone marketplace.
"There's a lot more competition on the mobile phone side, so they're evolving a lot more than PCs," said Mace. "You're getting faster innovation."
So Many Choices
Smartphones come in flavors:
- The BlackBerry boasts robust e-mail functionality, especially with Microsoft Exchange, but a relatively small selection of additional applications;
- iPhone, with its touch-screen navigation of the Internet, usable interface, excellent entertainment capabilities, and heretofore small selection of additional applications;
- Palm (Nasdaq: PALM), which has a touch screen, hundreds of add-on applications, and POP e-mail functionality;
- Symbian, with its hundreds of add-on applications, easy interface with SaaS applications such as Salesforce.com (NYSE: CRM), and worldwide availability;
- Windows Mobile, which is a compact version of Microsoft's OS with the ability to support Microsoft applications like MS Office;
- A yet-to-be-released open source system from Google (Nasdaq: GOOG) called "Android."
As consumers decide on a smartphone, however, they might be better off thinking about what functions and features they want, rather than which operating systems.
"In terms of users buying a smartphone, operating systems aren't the right way of talking about it," said Mace. "They should look at what they need to do, and pick a phone based on that."
Robert Lee Harris, president of Communications Advantage, an independent consulting company in the Los Angeles area, agrees.
"People really think about the user experience more than the operating system," said Harris. "They have an interface that they're comfortable with, so they don't think about the operating system."
So if you're in the market for a smartphone, think first about what you want it to do.
"We have people that have offices on the go," said Bob Gaines, technology marketing manager for All Covered, a consulting company based in Redwood City, Calif., that specializes in IT support needs for small businesses. "They're going to be the people who use BlackBerry."
For some businesses, however, a smartphone with broader capabilities is desirable.
"If your business uses a lot of technology, you'll probably want a Palm or iPhone," said Gaines.
Essentially, according to Gaines, smartphones mirror the people and businesses who use them.
"Your phone mimics how your business operates," said Gaines.
Thus, doctors might want a phone that supports applications that help them evaluate symptoms and diagnose illnesses; lawyers might need quick and easy access to legal databases; and Realtors might want convenient access to house listings. Different phone operating systems, in other words, with their various applications, might serve different professional and personal uses.
Apple Strikes Again
Of all the smartphones, however, the one that's seemingly on everyone's mind lately is Apple's new iPhone, to be released in July and priced at US$199. It will also be compatible with Microsoft Exchange and other programs that might make it more appealing to users looking for business, and not just entertainment, functions. Gaines predicts a surge in popularity in the iPhone, with its lower price, greater interactivity, and functions like GPS.
"A lot of people were waiting for push e-mail and other functions," said Gaines. "We will see people using iPhone because of e-mail functionality and the opening up to third-party applications."
Harris agrees about the coming surge in popularity in the iPhone.
"I think the iPhone will become huge because their newest interface is so much like other smartphones, and because it's linked into Exchange," said Harris. "If it works as well as they say it will work, it will be popular. That and the new price point will make it more widely adopted."
Mace, however, sees the iPhone, even in its new incarnation, as appealing mostly to users who want to play videos and listen to music, and not necessarily those who need to use their smartphones to check e-mail on the road.
"Without a keyboard, a lot of users won't switch [to the iPhone]," he said. "iPhone is all about people who want entertainment, and BlackBerry is more for heavy-duty e-mail."
Back to Basics
In the end, users need to evaluate smartphones and their operating systems not based on marketing hype, but on what they want from their phone.
Unlike a computer, which is more one-size-fits all, a smartphone is a highly personalized gadget tailored to the everyday needs of the person who carries it.
"The big thing to understand is that it's not like a PC," said Mace. "Smartphones are a lot more personal. What's useful to one person is not useful to others. You have to go to a specific operating system for what you want to do and the environment you want to support."
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