Palm Pre, a Hit - Smartphone Competition Grows, Says Yankee Group

Yankee Group in their latest report "Latest Palm Device "Pre"-views Future OEM-Operator Relationships" shows the smartphone category is becoming he most important competitive battleground in wireless today:

• Forty-one percent of consumers are likely to choose an advanced OS phone as their next mobile phone purchase.
• Smartphone volumes will grow to 38 percent of all handsets by 2013, representing the largest growth opportunity within mobile devices.
• The average U.S. consumer has had 4 mobile devices, increasing his or her appetite for enhanced features and more sophisticated designs when he or she purchases a fifth device.

Traditionally, operators have had the upper hand when working with device manufacturers to bring a new device to market, but the power dynamics are shifting. With more competitive entrants, tighter budgets and increased consumer expectations, OEMs and operators need to work together, on equal ground, to thrive.

"The release of the Palm Pre spotlights the changes in the OEM-operator dynamic," says Chris Collins, Yankee Group senior analyst. "Sprint and Palm, Inc. are two companies desperate for a blockbuster hit. And as such, they are either the perfect--or worst possible--partners for one another. The fate of both companies relies on the success of their alliance around the Pre."

There are really two stories to the Palm Pre. One story is the device itself, which--though flawed--offers a compelling alternative to Apple's iPhone. From its crisp out-of-the-box experience to its innovative Touchstone recharging accessory, the Palm Pre is a beautiful and powerful entrant in a competitive category.