Flurry of Smartphones Coming This Christmas

With More Android-Based Handsets on the Way, Apple's IPhone Finally Faces Real Competition

By Published on .

SAN FRANCISCO (AdAge.com) -- What a difference a year makes.

Last year, the iPhone ruled the smartphone roost, barely stirred by early challengers like the BlackBerry Storm and Android G1. This holiday season, more than a dozen touchscreen smartphones are out to take on Apple, with device makers and carriers banking on hearty appetites among consumers who want a minicomputer in their back pocket.

How hungry are U.S. consumers for smartphones? Twelve percent of the 4,255 U.S. consumers surveyed by Changewave in October say they plan to buy one in the next 90 days -- representing one of the highest percentages ever seen in the firm's quarterly smartphone surveys. Here's a look at the holiday crop:



PRICE: $200 for the entry-level 8GB model
Average plan cost over two years1: $2,839

BUZZ: Two-and-a-half years after launch, iPhone's sheen still shines, thanks to legions of loyalists and consistently superior user experience. It ranked No. 1 in Brand Keys' annual loyalty survey this year, while 74% of iPhone owners said they were very satisfied with the device, compared to 43% of BlackBerry owners.

MARKETING: The "There's an App for That" campaign showed the genius of the iPhone, which has transformed how consumers perceive and use their phone--and how the industry markets itself. The iPhone App Store boasts 100,000 apps, 10 times more than Android, its nearest competitor.

TEA LEAVES: The iPhone will continue to be the category favorite, helped by a $99 price tag on the older 3G model. And according to the Changewave survey, 36% of near-term smartphone buyers say they'll opt for one, compared to 27% who picked the BlackBerry and 8% who chose Palm. (The survey was run before Motorola introduced its Droid.)


CARRIER: Verizon Wireless

PRICE: $200
Average plan cost over two years1: $2839

BUZZ: Spec for spec, the Droid packs more than the iPhone, thanks to features like a physical keyboard, free turn-by-turn GPS and a camera with built-in flash. The phone also offers tight integration with Google services, including voice activated search. The thumbs-up reviews have reinforced Verizon's positioning of the Droid as a viable iPhone killer.

MARKETING: Droid will be Verizon's biggest product launch yet, eclipsing last year's BlackBerry Storm rollout, estimated at north of $100 million.

TEA LEAVES: Droid should help stem Verizon's customer losses to AT&T's iPhone. It's also the first Android phone to seriously challenge the iPhone and the Android open operating system, which should overtake the proprietary iPhone platform in a few years. "[The Droid] will do really well," said Harry McCracken, editor of Technologizer. "It's one of the most solid smartphones to date, and it's on a better network [than AT&T]."


CARRIER: Verizon

PRICE: $180
Average plan cost over two years1: N/A

BUZZ: The follow-up to last year's widely hyped but buggy BlackBerry Storm lives in the shadow of the Droid, which is hogging both the spotlight and Verizon's marketing dollars. Still, the Storm2 is drawing mostly positive reviews, getting points for WiFi support, voice-dialing and an improved touchscreen.

MARKETING: Verizon launched the Storm2 late last month with little fanfare. First aired during Game 1 of the World Series on Fox, the standalone, "lightning really does strike twice" TV spot will run for about two weeks, eventually becoming part of the broader device line-up in Verizon's holiday push.

TEA LEAVES: Decent sales, but don't expect a hit, analysts say. The consensus is that BlackBerry maker Research in Motion needs to gear up if it wants to compete in the multimedia smartphone space. "They're operating on a technology base that has few advantages now," said Craig Mathias, an analyst at the Farpoint Group. "Theirs was designed in an era when e-mail was the only mobile application that was important."



PRICE: PIXI: $99, PRE: $150
Average plan cost over two years1: PIXI: N/A, PRE: $2,309

BUZZ: PIXI: Hits shelves in less than a week, and like the Pre, comes with a touchscreen, full keyboard, and Palm's new operating system. It will also be lighter with a smaller screen.
PRE: The excitement has waned since the Pre's June launch, which coincided with Apple's new iPhone announcement. Palm won't talk sales so far but analysts estimate 500,000.

MARKETING: PIXI: Palm declined to discuss the handset's marketing, but with a campaign that launched at New York Fashion Week, its small form factor (Palm's thinnest phone ever), its name and the $99 price tag, it's meant to entice smartphone newbies and females.
PRE: Sprint will continue to push the Pre through the holidays but the new age, esoteric TV ads, panned as "weird" and "creepy," haven't connected with consumers.

TEA LEAVES: PIXI: Pixi's forerunner, the Centro, sold reasonably; by that logic, it should also perform respectably. The $99 price point should also up its appeal.
PRE: While it will keep some Sprint customers in the fold, it won't be a share-stealing, magnet. "People are disinclined to move to Sprint, even for a good phone," Mr. McCracken said.



PRICE: $200
Average plan cost over two years1: N/A

BUZZ: Motorola made this phone for the carrier that claims to have the most texters worldwide. Its main calling card is Motoblur, a social-networking overlay that aggregates content from users' social networks and lets people update their status from a homescreen widget. But it's been pegged as a device for teenagers, making the $200 pricetag perplexing. Another negative? It doesn't run on the latest Android software.

MARKETING: In October, Motorola unveiled a campaign for the "first phone with social skills," comically portraying the chaos of social networking, before the Cliq comes to the rescue and streamlines the process.

TEA LEAVES: Should do well within T-Mobile's base. "Motoblur is really impressive," said Current Analysis analyst Brad Akyuz. "It caters perfectly to T-Mobile's young demographic."



PRICE: $180

BUZZ: The Hero wins on hardware, and a customizable, proprietary user interface called HTC Sense. The third Android device to hit the market, reviews called it the most solid Android phone to date. But that billing was short-lived; weeks later, Droid emerged and took its bow as the best Android device.

MARKETING: HTC two weeks ago launched its inaugural branding campaign, showcasing a series of handsets, including the Hero, its flagship device. Expect message bombardment: the handset maker expects the average adult to see its advertising roughly 37 times through year-end, compared to a typical average of three times for a campaign of a similar duration. The "You" campaign promotes the idea of customization and personalization. "A phone that gets you" is the tagline.

TEA LEAVES: Hero was Sprint's top-selling device, according to Avian Securities' October store survey, boding well for continuing momentum into the holidays. But Mr. Akyuz notes that it could see competition from the Android-based Samsung Moment which shipped this month.

All prices assume new activation, a two-year contract with carrier and after rebate.
1. Average plan cost over two years per BillShrink.com

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