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Issues with smartphone user adoption

By Dilip Dand

Smartphones have been all the rage lately with the wireless carriers.

Apple's iPhone heralded a new age for the humble mobile phone. It morphed into a smartphone which you can use to browse the Internet, play games, take photos, watch television and listen to music by using your finger directly on the screen.

The iPhone gave rise to a slew of wannabes including Samsung Instinct, Sony Ericsson's Xperia, LG Viewty, HTC's Touch Diamond, Research In Motion's BlackBerry Storm, Nokia's N97 and the device based on Google's Android platform, the HTC Dream G1.

Media has showered lavish attention on smartphones, praising the various features of these devices. The early adopters, including yours truly, have drunk the Kool-Aid on this ad nauseam. There are some areas such as Silicon Valley and New York where you don't want to be caught dead without one of these puppies on you.

AdMob, one of the largest providers of mobile advertising solutions, published its September 2008 report on mobile ad display.

According to that report, the top four devices used to surf the mobile Internet were not smartphones at all, but rather the humble Razr V3 (the most popular phone nationwide) with 8.7 percent traffic led in the category followed by Kazr KC1, W386 and Z6m -- all from Motorola.

In fact, the iPhone, the standard bearer for smartphones, ranked seventh with 3.2 percent traffic and behind the BlackBerry Pearl and Palm Centro devices.

Carriers, handset makers and software providers have vested interest in hyping these devices for several reasons which all boil down to revenue.

If you listen to them, these devices are the next best thing to sliced bread and they are not able to keep up with the demand. However, if that was the case, this should be reflected in the numbers.

According to CTIA: The Wireless Association, there are approximately 263 million active mobile phones nationwide. According to the recent NPD Group study, there were 9 million smartphones at the end of July 2008, which represents about 3 percent of the total phones in the market.

Now, don't get me wrong -- the opportunity for growth is huge. But there are several obstacles that need to be overcome.

First and foremost is perception.

For a long time, the mobile phones were used only for calling even though text capabilities were always available. Only with the popularity of the "American Idol" television show did sending text messages took off as an additional function of the phone.

Similarly, majority of Americans don't use other features of their mobile phones.

Most Americans use their mobile phones to do two things: either call somebody or text somebody.

According to a recent Accenture survey, 88 percent of mobile phone users have never seen a video on their mobile device and 84 percent have never sent or received an email on the phone.

Clearly, the carriers, handset makers and software makers have to educate the masses for these trends to reverse.

Another important thing that the carriers have to address is the price.

Most smartphones, on average, cost $185 with a two-year contract. That is just for the phone.

If you want to buy a smartphone without the contract, the average price without a contract is between $600 and $850. On top of that, the cheapest voice and data plans together cost around $75 a month.

So, from an end-user perspective, the total cost of ownership (TCO) over two years is approximately $2,000, assuming you want to stay with your carrier for that long. It is a lot of money to spend on a device that may become obsolete within a year.

And with the current economic environment, carriers will have to quickly figure out how they can make it attractive for the user, or they will be in a world of hurt.

Finally, the user experience has to improve significantly before the mass market -- not just the early adopters -- begin buying and using smartphones.

Using touch is good first step. Smartphone makers have simplified the user interface. But there are ways to go before the average user can start using smartphones.

Dilip Dand is CEO of DvDand Solutions LLC, Pleasanton, CA. Reach him at .