Smart Phones & Mobile Local (Mo-Lo) Search
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.
Greg Sterling is the founding principal of Sterling Market Intelligence, a consulting and research firm focused on online consumer and advertiser behavior and the relationship between the Internet and traditional media, with an emphasis on the local marketplace.